Meat prices continue to rise; good news for cattle farmers

BATON ROUGE – Tighter supplies of cattle and hogs combined with improved domestic demand are keeping prices high, said LSU AgCenter economist Ross Pruitt.
Meat, poultry and fish prices have risen an average of 7.7 percent nationally since last year, according to Labor Department statistics.
The cost of ground beef has gone up 11 percent, pork has increased 9.4 percent and fish has spiked 4.2 percent since last spring, according to US Department of Labor statistics. Poultry prices increased 9 percent.
Ground beef at mid-level-priced grocery stores costs about $4.59 per pound, tilapia costs $5.99 per pound and pork chops cost $3.99 per pound — all marked up between 30 and 40 cents per pound since last year.
Nationally, ground beef rose from an average of $3.31 to $3.85 per pound from May 2013 to May 2014. Bacon increased from $5.09 to $6.04 and sirloin steak spiked from $6.79 to $7.58 per pound during the same period.
The USDA is projecting retail prices for beef will rise as high as 6.5 percent this year compared to just 2 percent last year.
Beef herds declined in 13 of the past 15 years due to drought, unprofitability and other factors, but cattle inventories are showing signs of growth over the next few years, Pruitt said. The result of those declines can be seen in retail markets where prices of ground beef, in particular, are inching up as more cows are kept for breeding rather than sent to market.
“Cow slaughter has declined 12 percent so far this year, which is supportive of ground beef prices, while total cattle slaughter is only down 5 percent,” Pruitt said.
The historic prices for live cattle favor Louisiana cattle producers, he said. Calves in the 500-pound range are bringing approximately $200 per hundred pounds.
The high price of beef is good news for Vermilion Parish cattlemen.
Cattlemen are getting higher prices for their calves when they go to market.
In 2007, a 450 pound steer sold for $1.21 a pound.
That same steer sold for $1.91 a pound in 2013. Today, the 450 pound steer is selling for above $2 a pound,
“We’re breaking history at this point,” Pruitt said of meat prices. And those include more than only beef.
Chicken production is slightly lower than last year, which is somewhat surprising as it was expected to be higher this year, Pruitt said.
Whole chickens sold by farmers in Georgia, the biggest producing state, rose 9.2 percent since the end of 2012 to a record $1.07 a pound on April 9, USDA data show
“We’ve seen some issues with the national breeding flock,” he said. That means fewer birds in production. In addition, avian influenza in Mexico over the past few years has created a strong demand for replacement hens in that country, which limited U.S. chicken producers’ ability to expand because hens were sent south.
“From a consumer standpoint, retail prices have been moving higher so far this year,” Pruitt said. Lower or flat year-to-date production in beef, pork and chicken is providing support for the price increases at the retail level.
The changes are most evident in grocery stores because most prices in restaurants are negotiated for several months in advance, so price changes are less dramatic.
The national hog herd has been affected by porcine epidemic diarrhea virus, or PED.
The disease was first identified in April 2013. Although not a threat to humans, the virus causes mortality in young pigs, reducing the number of hogs that eventually come to market.
Consumers are paying nearly 13 percent more for pork at the supermarket than they were this time last year, according to the U.S. Department of Agriculture. A deadly pig disease is partially to blame.
The disease is more prevalent in winter, so fewer pigs make it to market in the following summer. “An expected 2 to 3 percent increase in pork production likely won’t happen,” Pruitt said.
Retail prices for all meat are expected to rise slowly the rest of the year, with typical seasonal adjustments along the way.
“We can expect to see chicken availability to increase a little, but beef and pork are likely to remain below year-ago levels for the remainder of the year,” Pruitt said.
Consumers can also expect pork prices, which now average almost $4 a pound, to continue to rise during the second half of 2014.
Fish prices are up 4.2 percent since last spring.
Eggs costs were up 25 percent in early 2014, according to the U.S. Department of Agriculture.