Cattle prices remain high, though they are down from the record set last October. Beef prices, however, are still breaking records at the grocery store, University of Missouri Extension agricultural economist Ron Plain told the 2015 MU Spring Ag Marketing Outlook Conference on April 22.
"March average retail beef prices were $6.08 a pound," Plain said. "That's a record high for the fourth consecutive month."
Plain says that's because grocery store prices lag behind farm prices. In addition, the seasonal peak for beef prices is usually in March and April, so stores are reluctant to cut prices too much in advance of that. He says prices typically drop during the summer and consumers will see relief at the meat counter.
Hog prices, on the other hand, have pulled back significantly since last fall. At times hog prices have dropped to half of what they were a year ago, Plain said.
"Hog prices started dropping faster than cattle did and we've already seen prices in the grocery store decline as a result," he said. "The actual peak for grocery store pork prices happened in September and we've been lower each month since."
Plain says producers should see hog prices start to increase soon but still remain substantially lower than they were a year ago.
"Last year was the most profitable year ever to be in the hog business," he said. "Feed costs are going to be lower, so an average producer will make a little bit of money this year. Nothing like last year, but when the year is over with we expect them to be in the black."
Domestic demand for beef and pork has been strong this year but export demand has been down due to the strong dollar and a slowdown in the world economy. Plain says it's important that exports do well or cattle and hog prices may be lower than expected.
Presentation slides from the conference are available.
Source: University of Missouri Extension