Source: Lisa M. Keefe, MEATINGPLACE, 9/26/17



Ramped-up supplies will keep the downward pressure on consumer prices for red meat for the rest of the calendar year, although prices for all animal proteins are expected to increase moderately in 2018, according to USDA’s Economic Research Service’s Food Price Outlook report.

As of August 2017, the U.S. cattle herd was at its largest since August 2008. Relatively large cattle placements in feedlots in the first half of 2017, as well as more cattle available outside of feedlots, has increased the forecast for commercial beef production, putting downward pressure on prices throughout the cattle and beef complex, the agency said in its report.

ERS predicts beef and veal prices to decrease 2.0 to 1.0 percent in 2017 but increase 1.0 to 2.0 percent in 2018.

Lower beef prices are adding pressure to lower pork prices, along with an anticipated 4.9 percent increase in pork production in 2017. Large pork supplies are expected to change retail prices in a range of 0.5 percent lower to 0.5 percent higher in 2017 but increase 1.5 to 2.5 percent in 2018.

Beef and veal prices decreased 0.7 percent from July to August and are 0.8 percent higher than this time last year. In August, pork prices rose 1.4 percent from the previous month, and prices are 0.9 percent higher than in August 2016. Despite declining ham prices, bacon prices increased 2.7 percent and pork chop prices increased 2.0 percent in August.

Poultry
Prices for poultry rose 0.2 percent from July to August and are 1.0 percent higher than last year. Despite high broiler production, many broilers have low weights, which along with larger birds demanding higher prices, has contributed to higher retail poultry prices.

While prices are expected to increase at the retail level, price increases are still expected to be lower than the 20-year historical average of 2.1 percent.

ERS predicts prices to rise between 0.5 and 1.5 percent in 2017 and to increase an additional 1.5 to 2.5 percent in 2018.

CPI
The all-food Consumer Price Index (CPI) rose 0.1 percent from July to August, and food prices were 1.1 percent higher than the August 2016 level. The degree of food price inflation varies depending on whether the food was purchased for consumption away from home or at home: The food-away-from-home (restaurant purchases) CPI rose 0.3 percent in August and is 2.2 percent higher than August 2016; and the food-at-home (grocery store or supermarket food items) CPI was flat from July to August and is 0.3 percent higher than last August.

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