Data from the US Bureau of Labor Statistics showed that retail prices for meats were 69.07% higher in 2019 than in 2000, a $13.81 difference in value, but no one in the production and distribution chain got all of that.
However, it’s clear that growth in livestock producers’ portion of the pie grew much more slowly than did other areas of meat production and distribution.
Compared with the overall inflation rate of 2.10% during the same period, inflation for meats was higher, the BLS said.
Between 2000 and 2019, Meats had an average inflation rate of 2.80% a year, the BLS said. This rate of change indicates significant inflation. In other words, meats costing $20 in 2000 would cost $33.81 in 2019.
In 2000, pricing changed by 5.90%, which was significantly more than the average yearly change for meats during 2000-2019 period, the BLS said. Compared with inflation for all items in 2000 of 3.38%, inflation for meats was much higher.
BEEF SPREAD ALSO GROWS
Data from the USDA’s Agricultural Marketing Service and the Economic Research Service compiled by the Livestock Marketing Information Service in Denver, also showed growth in the farm-to retail price spread.
The average monthly farm-to-retail price spread in October was $1,522.36 per cwt of beef, the LMIC said. The spread in October of 2,000 was $745.03 per cwt of beef, a jump of $777.33, or 104.3%.
However, the average monthly live fed steer live price in Kansas in October was listed at $109.06 per cwt, compared with $67.99 in the same month in 2000 for a gain of $41.07, or 60.4%.
Over the same period, the live-to-cutout price spread widened by $267.66 per cwt of beef, or 217.8%, going to $390.57 from $122.91.
And the cutout-to-retail price spread in October was $1,131.79 per cwt of beef, up $509.67, or 81.9%, from $622.12 in October of 2000.
The LMIC also calculates a retail all fresh beef demand index annually from the Consumer Price Index with 2000 being the index year of 100. It is interesting in that it doesn’t show a strong correlation to rising production and distribution prices through the 200-2018 period.
The highest annual beef demand index was 114 in 2004, followed by 112 in 2015. The lowest point in the index was 92 in 2010. Last year, it was 107.
PORK SPREAD WIDENS
The farm-to-retail price spread of pork also widened during the period, being calculated by the LMIC last month at $415.00 per cwt of pork, compared with $252.74, a gain of $162.26, or 64.2%.
Market hog prices varied over the period but were pegged in October at $65.67 per cwt on a live basis, versus $59.96 in October 2000, for a gain of %5.71, or 9.52%.
The live-to-cutout spread last month was $43.63 per cwt of pork, up from $16.25 in October of 2000, for a gain of $27.38, or 168.5%.
The cutout to retail spread of $371.37 per cwt compared with $236.49.
CATTLE, BEEF RECAP
Cash cattle trading this week was reported at $115 to $117 per cwt, steady to up $1 from last week, and at $180 to $184 on a dressed basis, down $2 to up $1.50.
The USDA choice cutout Thursday was down $3.35 per cwt at $234.86, while select was off $0.91 at $213.86. The choice/select spread narrowed to $21.00 from $23.44 with 81 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Wednesday was $145.86 per cwt, down $0.41 from the previous day. This compares with Thursday’s Nov contract settlement of $145.52, down $1.07.