High food prices due to supply chain crisis 3:04
New York (CNN Business) -
Shoppers are already taking a hit at grocery stores.
Soon, even your cheapest meat options will become more expensive.
Tyson Foods (TSN), Conagra (CAG) and Kraft Heinz (KHC) have notified their retail customers in recent weeks that they will raise prices in January for some frozen and refrigerated meats.
Products that will see increases include Ball Park's hot dogs and burgers, State Fair's corn hot dogs, Jimmy Dean's frozen breakfast, Hillshire Farm's hot dogs and meats, and Hebrew National and Oscar Mayer's hot dogs. according to the letters of the suppliers to the wholesale clients consulted by CNN Business.
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"All the suppliers of packaged meat are attending the price increase party," a regional distributor leader told the stores who spoke on condition of anonymity to protect his company's relationship with the suppliers.
Prices for high-quality cuts of meat such as steak, veal, and pork chops have skyrocketed in the past year.
But prices for cheaper meats like ground beef and lunch meat have risen more slowly, while hot dog prices were actually 1.2% lower in September than at the same time last year. , according to the latest data from the Bureau of Labor Statistics.
Prices for meat brands such as Jimmy Dean, Ball Park, Hebrew National and Oscar Mayer are expected to rise.
If customers of major suppliers, which include department stores, supermarkets, pharmacies and others, decide to pass on these latest increases, even the meats that buyers often seek when prices rise will become more expensive.
That may lead some shoppers to avoid the meat zone at grocery stores or turn to discount chains like Aldi and dollar stores, analysts predict.
"Meat is the center of the plate for Americans, and these price increases are going to hurt a lot," said Chris DuBois, senior vice president of protein practice at market research firm IRI who consults with grocers about meat trends and strategies.
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Meat producers are raising prices and reducing product promotions to combat higher costs for commodities, packaging, labor, transportation, and other inputs.
Tyson sent a letter to at least two regional distributors last month saying that prices at Ball Park, Hillshire Farm, Jimmy Dean, State Fair and all deli meats will increase in the range of 5% to 10.2% to starting January 2 for "all retail customers."
The distributors shared the letters with CNN Business on condition of anonymity.
"We continue to face accelerating levels of extraordinary inflation," Tyson said in the letter.
"The sustained duration and significant impact of inflation require additional price action."
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A Tyson spokesperson said in an email to CNN Business that the company was "carefully managing these inflationary pressures through price action and cost-cutting efforts."
Conagra alerted one of the distributors this week that it will increase prices starting January 24 for Hebrew National's hot dog pack varieties, such as beef sausage, 97% fat-free beef sausage, and jumbo beef sausage. as well as a quarter pound and veal sausage for bun.
The price increases range from 10.9% to 12.6%.
In the letter, Conagra said it was cutting costs in all its operations, but the "sustained increase in packaging and ingredients will require" the company to increase prices.
A Conagra spokesperson did not say how many retail customers were notified of the price increases.
Kraft Heinz said in a Nov. 1 letter to retail customers that it will increase prices for Oscar Mayer varieties of beef, lean beef, and Angus hot dogs, as well as cheese dogs, by about 8% from Sept. 9. from January.
A Kraft Heinz spokesperson told CNN Business that the price increases applied to all of the company's retail customers.
The company has raised prices by an average of 5% on 80% of its products "to help offset the rising inflation facing the entire industry," the spokesperson said.
At the same time, Kraft is also introducing more affordable prices and value sizes in brands like Lunchables.
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Price increases on meat and other grocery store staples can force changes in consumer behavior and pose a threat to supermarkets, said DuBois of IRI.
When prices in customers' regular stores become unaffordable, they are more willing to leave the store for cheaper ones.
"That's the great unspoken danger that worries many retailers right now. We could see some major shifts in retail market share starting next year."
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