Meat prices on the rise, could lead consumers to poultry | TSLN.com

Meat prices on the rise, could lead consumers to poultry

Retail meat prices in December posted the biggest increase in seven years, with pork jumping the most in 14 years. A meat price index tracked by the Bureau of Labor Statistics rose 7.2 percent last month compared to December 2009, the largest year-over-year gain for that month since 2003, according to a report released Jan. 14, 2011. Pork prices last month were up 11.2 percent from year-earlier levels, the largest increase for December since 1996, while beef rose 6.1 percent.

Prices for some cuts, such as bacon, reached record highs last year, and many analysts expect beef and pork to become even more expensive this year as high grain prices discourage adding animals to herds.

“It is still primarily a supply-side issue on the meats,” said Daniel Madison, a researcher at the Food and Agricultural Policy Research Institute at the University of Missouri. “We expect more of the same through 2012, as the economy hopefully improves and the demand side of the picture becomes more of a factor as well,” Madison said. Assuming tight supplies continue and demand strengthens, “prices could continue to move up, and strongly,” Madison said.

More expensive beef and pork is a concern for producers because chicken production is expanding and unemployment remains high, which could push budget-tightening consumers toward cheaper meats, analysts said. Poultry industry executives have said recently they see opportunities to exploit the price differences and grab a bigger share at the supermarket meat case.

Additionally, corn prices, up 67 percent over the past year, are squeezing beef and pork producer profits, making any major herd expansion unlikely, analysts said.

Retail meat prices in December posted the biggest increase in seven years, with pork jumping the most in 14 years. A meat price index tracked by the Bureau of Labor Statistics rose 7.2 percent last month compared to December 2009, the largest year-over-year gain for that month since 2003, according to a report released Jan. 14, 2011. Pork prices last month were up 11.2 percent from year-earlier levels, the largest increase for December since 1996, while beef rose 6.1 percent.

Recommended Stories For You

Prices for some cuts, such as bacon, reached record highs last year, and many analysts expect beef and pork to become even more expensive this year as high grain prices discourage adding animals to herds.

“It is still primarily a supply-side issue on the meats,” said Daniel Madison, a researcher at the Food and Agricultural Policy Research Institute at the University of Missouri. “We expect more of the same through 2012, as the economy hopefully improves and the demand side of the picture becomes more of a factor as well,” Madison said. Assuming tight supplies continue and demand strengthens, “prices could continue to move up, and strongly,” Madison said.

More expensive beef and pork is a concern for producers because chicken production is expanding and unemployment remains high, which could push budget-tightening consumers toward cheaper meats, analysts said. Poultry industry executives have said recently they see opportunities to exploit the price differences and grab a bigger share at the supermarket meat case.

Additionally, corn prices, up 67 percent over the past year, are squeezing beef and pork producer profits, making any major herd expansion unlikely, analysts said.

Go back to article