Challenges in the beef and pork industry have led to higher retail prices.
By: Jeannine Schweihofer, Michigan State University Extension
As the weather starts to show more signs of sunshine and family gatherings increase with summertime, the increased cost for red meats are causing some consumers to complain about the prices. Depending on the cut and type of meat, meat prices have risen at the retail level (Table 1). Beef prices are about 8 percent higher than a year ago and pork prices are up 10 percent or more.
Supply is driven by number of animals and weight of those animals at the time of harvest. While increased carcass weights have offset some expected decrease in production, beef production is down almost 6 percent compared to a year ago. Most of the increases in beef prices are tied to the lowest supply of cattle since 1952. The tight supply has been anticipated for several years as drought hit areas of the country that typically raise lots of cattle and farmers and ranchers were forced to sell animals.
One of the major challenges for the pork industry is Porcine Epidemic Diarrhea virus (PEDv) that has caused an increase in the cost of pork products. It is important to note that PEDv is a disease only related to swine and does not affect the quality or safety of pork. Michigan State University Extension has been working with Michigan producers as PEDv has affected several swine operations in the state. Pork production has been offset by higher carcass weights but is still down almost a percent since last year. Losses of pigs from PEDv have caused pork prices to be higher than they would have been without the disease.
According to the USDA, cold storage for red meat and poultry is down. Inventories of beef decreased 21 percent compared to a year ago and were 10.6 percent less than the 5-year average. Pork inventories were 16.7 percent less than a year ago but only 2.9 percent less than the 5-year average. Poultry inventories showed significant changes in whole broilers decreased 48 percent from a year ago and 55 percent less than the 5-year average. The decline in cold storage stocks of meat and poultry were expected given the decreased inventories of live animals and overall meat production expected for the year.
Market indicators and USDA Economic Research Service suggest that meat prices will remain higher at retail. Meat is one of the many foods that is increasing in price.