Consumers Continue Paying Up For Beef

Despite comparatively high prices, it looks as though consumers are continuing to pay up for beef, mocking predictions of a mass consumption shift to pork or chicken.

Monthly USDA studies of retail and wholesale prices for beef show a continuing climb to record-high prices amid warnings from some analysts that such gains may be short-lived once the grilling season gives way to summer heat.

The USDA’s April retail value for all choice beef was placed at 640.2 cents a pound.  This is up 9.3 cents, or 1.47%, in just one month from March’s 630.9 cents.

The USDA’s April retail value of all beef surpassed the previous peak, which came in January at 633.3 cents a pound.  The value dropped in February to 627.0 cents but has been climbing ever since.

The April retail value is 53.1 cents, or 9.04%, higher than April 2014’s 587.1 cents.




The issue with many analysts is that while beef prices keep rising, pork continues to slide with increased production.

The USDA’s calculated monthly retail price for all pork products in April was 376.9 cents a pound, down 10.5 cents from 387.4 cents just a month earlier.  Retail pork prices have declined every month since peaking at 421.5 cents in September of last year, a 10.6% slide.

The April retail price for pork was 18.1 cents, or 4.58%, below the year-earlier price of 395.0 cents.

The price action is behind analyst predictions that consumers will switch from beef to more pork.  Economics textbooks say at some point they will, but so far, that point does not appear to have been reached.

Wholesale prices for pork also appear to be struggling as production ramps up.

April’s wholesale pork value was placed at 133.3 cents a pound, only marginally above the 133.0 cents in March.  However, this was 89.8 cents, or 40.3%, below the latest peak wholesale price of 223.1 cents attained in July 2014.  A year ago, the wholesale price was 202.5 cents.




Meanwhile, the retail price of chicken remains in a narrow range, with the Economic Research Service putting the composite price at 199.733 cents a pound in April, compared with 198.729 cents in March and 192.908 cents a year ago.

Wholesale chicken prices show similar stability.  The Economic Research Service’s wholesale broiler composite price for April was 84.819 cents a pound, down from March’s 85.782 cents and from the year-ago April price of 85.908 cents.

Some market analysts say that pork does not compete with beef as well as chicken does – that consumers would rather do a beef-to-chicken switch than a beef-to-pork switch, which would seem to be the more natural substitution.

If that’s the case, the price difference between beef and chicken, at 440.467 cents a pound, bears watching this grilling season, which unofficially ends with the Independence Day holiday.




Cash cattle markets were quiet Tuesday with no bids or offers reported.  Cattle last week traded steady to $1 per cwt lower at $159 to mostly $161 on a live basis and at mostly $256 on a dressed basis.

Feedlot showlists were reported lower in all Plains feeding areas except Texas, where the number of cattle offered to packer buyers was up more than the declines in other feeding states.

Beef prices Monday were up a bit with the USDA choice cutout at $261.07 per cwt, up $0.82, and the select cutout at $249.20, up $1.58.  Volume was slow to moderate with 89 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Monday was up $0.54 per cwt at $222.01.