Record increase in March farm-to-wholesale beef price spread driven by sharp wholesale price changes in mid-March 2020

A sharp increase in the wholesale value of beef, along with a modest decline in the value of steers between February and March 2020, produced a larger monthly increase in the farm-to-wholesale price spread for Choice beef than ever before. The farm-to-wholesale price spread calculates how much the farmer receives versus how much the wholesaler receives on a per-pound basis. The price spread increase of 42 cents per pound of retail product in March 2020 was the largest since August 2019 when the spread rose over 36 cents per pound in one month, reaching the all-time high. At that time, a beef plant in Holcomb, Kansas which comprised about 6 percent of U.S. beef packing capacity, had caught fire and shut down, instantly tightening wholesale supplies. The March run-up in wholesale beef prices may be attributed, in part, to an increase in grocery store demand for beef, as consumers prepared to shelter in place due to COVID-19 and supply chains adjusted to stronger retail demand and weaker food service demand. This chart is drawn from the Economic Research Service’s Meat Price Spreads data product.

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