CME: Near-record for Beef, Pork Prices; New Record for Composite Chicken Prices18 July 2013
US - USDA estimates of retail meat and poultry prices for June, which were released on Monday, indicate a new record for the composite chicken series and near-record for three other key items, write Steve Meyer and Len Steiner.
The monthly data for Choice beef, all-fresh beef, pork, composite broilers and turkey are shown in the chart below.
Some highlights of the June data are:
- As mentioned, a new record for the composite chicken price at $1.992 per retail pound. This price is a weighted average of chicken part prices and June’s value broke the old record of $1.971 per pound set back in December. June’s value is 2.3 per cent higher than that of May and 4.3 per cent higher than one year ago.
- The average price of whole broilers (not shown in the chart) was $1.509 per pound in June. That value is the third highest monthly figure ever and is just 1.1 cents short of the record set in October of last year.
- The average price for Choice-grade beef in June rose 1 per cent from May to reach $5.294 per pound. That figure is just $.006 short of the record value set back in March and is 7.3 per cent higher than one year ago. The June price is likely to reflect record-high cutout values, so new assaults on the March record may be difficult to muster, at least in the short run.
- The all-fresh beef price, which includes Select and non-graded beef products, rose 2.3 cents or 0.5 per cent from its May level to reach $4.900 per pound. That figure is 4.1 per cent higher than last year and misses its record level of $4.912 per pounds set in January.
- It has been longer since the retail pork price was established but June’s value of $3.551 per pound, like its beef counterparts, just barely missed the old record. That record of $3.561 was set in September of 2011 and may not survive this summer as the high cutout values of late June will not likely be reflected in retail prices until this month. And August values are usually close to those of June. The June pork price was 1.7 per cent higher than that of May and 4.5 per cent higher than one year ago.
- The only species whose retail price is not near record-high is turkey. The June average turkey price was $1.595 per pound, well short of the record $1.812 back in March 2012. The June value was 3.6 per cent lower than in May but 2.4 per cent higher than one year ago.
Looking at the various retail prices in real (ie. deflated) terms presents a bit of a different picture. The following chart presents the monthly retail prices in terms of year 2000-2002 dollars. We think it underscores a huge present and future challenge for the beef industry since its products, which have always been the most expensive in both nominal and real terms, have increased steadily relative to the competition of the past two years.
If one looks at the percentage changes in these real prices since 2008, beef hasn’t lost a lot of ground except to chicken. June’s Choice and all-fresh beef prices were up 12.8 and 13.8 per cent, respectively, from the average 2008 price levels. The June pork price was up 11.4 per cent from 2008 while the prices of whole chickens and turkey were 15.2 and 17.6 per cent higher, respectively, than in 2008. But the composite chicken price was up only 5.1 per cent from the 2008 average indicating that the chicken sector has indeed gained an advantage since feed costs began rising.
Further, consumers do not spend percentages, they spend dollars and it is clear that real beef prices have risen more in dollar terms than have the prices of the competitors. And unlike the 1998- 2004 price growth that was driven by stronger beef demand, the recent increases have been caused primarily by tighter and tighter supplies. A product can do that for only so long before becoming a luxury.
TheMeatSite News Desk