Source: Rita Jane Gabbett, MEATINGPLACE, 12/31/18



Retail prices for beef and poultry may inch up in U.S. stores in 2019, but pork prices just might decline, according to the latest forecasts from USDA’s Economic Research Service.  

Beef
Beef production is expected to continue expanding in 2018 due to slightly higher expected carcass weights, combined with more cattle put on the market and greater expected cow slaughter. Although feeder cattle prices were stronger than previously expected, prices throughout the cattle and beef complex in 2018 have remained below 2017 levels. Lower prices at earlier stages of production are likely to place downward pressure on retail beef and veal prices in 2019. ERS expects retail prices for beef and veal to increase 1.25 to 2.25 percent in 2018 and rise an additional 1.0 to 2.0 percent in 2019.

Poultry
While prices may increase at the retail level, price increases in 2018 and 2019 are still expected to be lower than the 20-year historical average of 2.0 percent. Lower projected feed costs and higher poultry production forecasts could place downward pressure on retail price inflation. Retail poultry prices are expected to change between 0.0 to 1.0 percent in 2018 and increase 1.0 to 2.0 percent in 2019.

Pork
Lower beef prices are most likely adding pressure to lower pork prices as consumers make meat substitutions. In 2018, pork production is expected to continue expanding as more pork processing facilities come on line. As a result, ERS expects pork prices to change between -0.75 and 0.25 percent in 2018 and change between -0.75 and 0.25 percent in 2019.

Dining out
USDA predicts the cost of eating food away from home will increase by 2 percent to 3 percent in 2019, on the back of the same increase in 2018.

A little history
Between the 1970s and early 2000s, food-at-home prices and food-away-from-home prices increased at similar rates. Since 2009, however, food-at-home and food-away-from-home price growth has diverged. While grocery prices have deflated in recent years, restaurant prices have been rising consistently month-over-month. These differences are due, in part, to variations in the cost structure of restaurants versus supermarkets or grocery stores. Restaurant prices primarily comprise labor and rental costs with only a small portion going toward the food being served. For this reason, decreasing farm-level and wholesale food prices, which have exerted downward pressure on food-at-home prices, have had less of an impact on restaurant menu prices.

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