US consumer prices for food are lagging the general economy with meat and poultry items standing out, suggesting consumers may be willing to pay more for protein.
The Bureau of Labor Statistics said, the US economy continues to grow with the February Consumer Price Index for all items at 243.603, above last year’s 237.111 and the 2011-2015 average at 230.1282.
However, the CPIs for red meat and poultry remained below last year although above the previous five-year average, even though the CPI for all food and beverages was about even with last year and above the average.
GENERAL CPI GROWING
The general CPI, which is watched closely by the general investing public and which influences the equities market and monetary policy from the Federal Open Market Committee. FOMC members use the CPI as one of their considerations about the general health of the US economy when they consider were to set the Fed Funds rate, the basis for all other interest rates in the country.
The US CPI in February grew by 6.492 points, or 2.74%, from a year ago and was up 13.475, or 5.86%, from the five-year average of 230.1282.
That means the average price of all things consumers spend money on was up 2.74% from a year ago and 5.86% from the average.
FOOD COSTS HOLD THE LINE
However, the food and beverage component of the CPI held about steady with last year at 248.595. This was up only 0.136 point, or 0.05%, from February 2016 when it was 248.459.
The February number, however, was up 12.902 points, or 5.47%, from the 2011-2015 average of 235.6934.
With food costs lagging the general economic improvement and lower unemployment, spending for the USDA’s domestic food and nutrition programs totaled $101.9 billion in fiscal 2016, down 2% from 2015, and down 7% from the historical high of $109.2 billion in fiscal 2013, according to a report from the USDA’s Economic Research Service.
MEAT CPIs DOWN
The CPI for red meat in February was 246.58, down 7.682, or 3.02%, from 254.262 a year earlier, but up 8.6608, or 3.64%, from the five-year average of 237.9192. The decline in the meat CPI began last year in May as supplies began to increase. This year, the CPI is rising in tune with seasonal tendencies, which peak in October.
Likewise, the CPI for poultry was below last year in February and above the five-year average. The poultry CPI was 228.979, down 2.435, or 1.05%, from 231.414 a year earlier but up 4.301, or 1.91%, from the 2011-2015 average of 224.678.
CASH CATTLE QUIET
No cash cattle trade was reported Tuesday. Asking prices were reported at $130 per cwt on a live basis and $208 on a dressed basis.
Last week, cash markets ranged from $126 to $128 per cwt on a live basis and from $208 to $210 on a dressed basis.
Average fed cattle exchange auction prices last Wednesday were $2.34 per cwt lower at $130.97, versus $133.31 a week earlier.
The USDA’s choice cutout Tuesday was down $0.69 per cwt at $213.43, while select was off $2.65 at $201.35. The choice/select spread widened to $12.08 from $10.12 with 81 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Friday was $133.33 per cwt, up $0.56. This compares with the Apr settlement of $133.07, down $0.87.