U.S. retail costs for eggs and boneless sirloin steak rose to records in September, defying an increase in meat and poultry production that sent prices for chicken and other grades of beef lower.
Egg prices climbed 0.8 percent to $2.966 a dozen from August after jumping 15 percent last month, data from the Bureau of Labor Statistics showed Thursday. Costs have surged 51 percent from $1.962 in May. The outbreak of bird flu in the Midwest this year led to the deaths of millions of egg-laying hens and turkeys. There have been no new cases of avian influenza reported since June.
“That’s a pretty significant supply shock to the entire system,” John Anderson, deputy chief economist at the American Farm Bureau Federation in Washington, said in a telephone interview. “It’s not necessarily something that you recover from overnight.”
A glut in commodities from grains to milk sent the August index of 73 prices tracked by the United Nations’ Food & Agriculture organization to the lowest since April 2009. On Sept. 25, the U.S. Department of Agriculture said food costs at home this year will increase 1.5 percent to 2.5 percent, trailing the 20-year average.
Boneless sirloin steak rose 1.9 percent to a record $8.864 a pound in September. Ground beef dropped 0.8 percent to $4.126 a pound, and beef roast fell 1.5 percent to $5.785 a pound, sending both to the lowest since late 2014. Beef production is expected to increase in 2016 for the first time in six years as cattle herds expand following prolonged drought in the southern U.S.
“We look like we’re sort of topping out on retail beef prices,” Anderson said. “In the wholesale market over the last month or so, prices have weakened quite a bit. We haven’t gotten that on retail yet, but it’s on its way.”
In 2015, red meat and poultry production will climb 2.7 percent to 94.4 billion pounds from a year earlier, the USDA said on Oct. 9. Output will rise 3 percent in 2016.
In September, prices for fresh whole chicken and boneless chicken breasts fell to the lowest in at least two years, while bacon prices climbed to the highest in almost a year.