Retail meat prices for both beef and pork will be a bit higher this grilling season on the back of the Porcine Epidemic Diarrhea Virus and drought-driven tighter beef supplies, University of Missouri and American Farm Bureau economists say.
"Farmers and ranchers are raising smaller numbers of hogs and cattle. This is the key factor contributing to higher retail meat prices, a trend that is likely to continue through the summer and, at least for beef, into next year," AFBF's deputy chief economist John Anderson said.
Beef retail price outlook
The long-term effects of searing back-to-back droughts in 2011 and 2012 resulted in less feed available for cattle, and ultimately forced a substantial decline in cattle numbers that is now resulting in lower beef production and higher beef prices.
Consumers saw these impacts with a sixth straight month of new record retail prices at $5.40 per pound – a 23% increase compared to the 2010-2012 average, Anderson said.
Year-to-date beef production is down by close to 5%, according to the USDA. Meanwhile, University of Missouri Economist Ron Plain says, future cattle prices are predicted to be around $1.40 per pound and cow-calf profit margins should remain about $350 per cow.
Pork retail price outlook
For pork, the average retail price per pound in March – $3.83 – was higher than the four previous months and 18% higher than in 2010-2012.
A driver of the increases, PEDV, is expected to result in a 2% decline in 2014 production according to USDA, further influencing retail prices for bacon, ham, pork chops and other products.
Plain says PEDV has also resulted in the largest-ever drop (down 5.5%) in pigs per litter, which occurred from December to February.
"We haven't seen this magnitude of loss before," Plain said, though warmer weather is expected to slow the disease's spread.
Over the summer, Plain said hog prices are still expected to remain well above $100 per hundredweight, potentially declining to the $90s by the end of the year.
So far, The U.S. Bureau of Labor Statistics reports that a pound of bacon averaged $5.55 in March, 21% more than last year. Ham increased by 12.5% to $4.20 per pound.
Though retail prices are higher and bargains could be hard to find, Anderson reminds consumers that the meat will be available.
"Meat supplies will continue to be plentiful," Anderson explained. "From burgers to brats, steaks to chops and everything in between, consumers will have no problem finding their favorite meats for summer barbeques and cook-outs."
Source: AFBF, MU