Chicken prices at the grocery store are 2-percent lower than a year ago and wholesale beef prices have started to decline, two signs that meat prices are returning to normal, according to the Food Price Index. The monthly food-inflation report forecasts that retail prices of meat, poultry and fish will rise by an average 3 percent this year – less than half of the 7.2 percent of 2014 and in line with historical rates. Consumers spend 13 cents of the food dollar on meat, poultry and fish – the largest segment of grocery spending – to eat at home. Beef, pork and chicken soared to record-high prices last year due to short supplies and high domestic and export demand.
Pork prices are expected to drop 3.5 percent this year, compared to the 9.1 percent increase last year, while beef prices, after soaring 12.1 percent in 2015, would moderate somewhat with a 6-percent increase. Beef and pork prices are forecast to rise by a modest 2 percent in 2016. Hog farmers boosted production in response to the high market prices. Cattle ranchers also are expanding herd size but need 12-18 months to bring more cattle to slaughter weight.
The number of cattle being fattened for slaughter is up 2 percent from a year ago, said the monthly Cattle on Feed report, released on the same day as the food inflation forecast. Steers accounted for an unusually large 68 percent of the feedlot inventory on Oct. 1, a sign that ranchers are holding on to heifers for breeding.
Poultry prices are forecast to rise by a negligible 1.5 percent this year, a reduction from the previous USDA estimate of 2 percent, said the Food Price Outlook. Broiler chicken production is up at the same time some countries are banning or restricting U.S. poultry products due to the bird flu. “This has resulted in more chicken broilers remaining on the U.S. market, which in turn places downward pressure on real chicken prices,” said the USDA.
Egg prices are up 36 percent from one year ago, a sign of the continuing effect of the bird flu epidemic that killed 10 percent of the egg-laying flock last spring. For the year, the USDA forecasts egg prices will be an average 13-percent higher than the average 2014 price. The average price for a dozen Grade A Large white eggs is $2.01 this week, compared to $1.56 a year ago, says the USDA’s weekly retail egg report. Table egg production during September was 10-percent smaller than the previous September.