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CME: Retail Pork, Beef Prices Decline Slightly in August

17 September 2019

US - On Friday, the US Census Bureau released their advance survey of monthly retail and foodservice sales for August, it showed solid year-over-year growth rates, according to Steiner Consulting Group, DLR Division, Inc.

Using the non-seasonally adjusted data, total retail and food services in August increased by 4.2 percent compared to 2018’s. Food sector retail sales posted even stronger year-over-year growth (up 5.4 percent), which was the most significant gain since April of this year.

Retail sales at grocery stores had a 4.9 percent increase, the same as in July. On average, over the prior six months (February through July), food sector sales were up 3.9 percent from 2018’s, and grocery stores increased by 2.9 percent.

The Bureau of Labor Statistics collects a limited number of meat and poultry prices at retail establishments to calculate the Consumer Price Index (CPI). Those data were released last Thursday for August.

CPI for meats had a slight month-over-month dip in August (down 0.3 percent) but was 0.7 percent above a year earlier. For poultry, the CPI was virtually unchanged for the month (up 0.1 percent) and declined by 0.7 percent compared to a year ago.

Also, last Thursday, the USDA’s Economic Research Service (ERS) released their monthly calculated retail prices, which use the BLS collected retail prices (the data are here). Those retail items (steak, ham) are aggregated into beef, pork, etc.

For August, both retail pork and beef prices declined slightly (see graphics). Year-over-year, the calculated pork price rose by about eight cents per pound (up 2.1 percent), while beef increased only about two cents per pound (up 0.4 percent). Compared to the prior 5-year average (2013-17), the August pork price was unchanged, and beef had increased by 13 cents per pound (up about 2 percent).

It’s too early to assess how retail prices changed after the packing plant fire-induced surge in wholesale beef prices. There are several reasons, including the nature and timing of the CPI survey, the broad paintbrush use by ERS to make their calculations, and the fact that carcasses are chilled, processed, and transported after harvest before they even reach retailers.

Also, a significant amount of meat is forward priced. Overall, retail prices tend to be "sticky", that is they adjust rather slowly compared to boxed beef cutout values.

At the bottom of the page is a summary production and price summary gleaned from USDA Agricultural Marketing Service (Market News) reports. We highlight that Federally Inspected (FI) cattle slaughter lagged a year ago more so than in recent weeks.

Still, the preliminary average cattle weight has remained below 2018’s. Larger FI hog slaughter, up 18.5 percent week-over-week and 12.4 percent year-over-year, reflects catching-up on harvest after hurricane Dorian disruptions at some Eastern US packing plants.

Daily Livestock Report - Copyright © 2008 CME. All rights reserved.

TheCattleSite News Desk

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