July Retail Meat Prices Lower As Supplies Climb

Grocery store meat prices moved lower in July, generally reflecting larger production this year, said the Livestock Marketing Information Center citing data from the US Department of Labor, Consumer Price Report and USDA data.

Fresh beef prices in July were down 6% from a year ago, chicken prices were down 3%, and pork prices were close to unchanged, the LMIC said.  The July 2015 beef price was record high and has since declined in nine of the last 12 months.

Grocery store chicken prices peaked in October 2013 and annual average prices have trended lower since then.

July 2015 pork prices were 9% lower than a year earlier because of a surge in pork production last year and have resisted any significant declines since then, the LMIC said.  Pork supply this year has been running close to a year earlier, lending support to stable retail pork values.

The seven-cent June-to-July decline in fresh beef prices was the biggest monthly decline since December, and from July to August last year, retail fresh beef prices declined six cents.  A similar decline similar is possible again, given this year’s declines in wholesale beef prices.

Choice beef carcass prices during the second quarter were down 14% from the same quarter of 2015, and carcass prices so far this summer are below June’s.

 

RETAIL PORK PRICES UNUSUALLY STABLE

 

Grocery store pork prices have been unusually stable this year with monthly changes since March staying in a three-cent range.  Last year, there was an 18-cent range, and the 2014 second-quarter range was 30 cents.

The same price stability has not existed at the wholesale level where the value of a hog carcass traded a 12-cent range (based on monthly average), not that much different from the 15-cent range at wholesale from March to July 2015.

The change in pork prices from July to August in 2014 and 2015 was up seven cents.  This kind of change is not probable this year because of competition from beef and chicken.

Grocery store chicken price changes from July to August 2014 and 2015 were up one cent and unchanged, respectively.  A similar situation is in place for this year and probably for September as well.

 

AUG. 1 CHICKEN STOCKS LARGEST EVER

 

Frozen chicken inventories at the beginning of August were up 7% from a year earlier and were the largest Aug. 1 stocks since 2002.

The crux of the problem is wings, with frozen inventories up 58% from a year ago, and breast meat inventories that are up 20%.

Marketing efforts to move those products should keep a lid on retail prices, LMIC said.  The 4-million-pound net in-movement of chicken into freezers during July was the smallest increase for that month since 2012, but cold-storage inventories already were large and need to decline in coming months as consumer demand for chicken tends to wane seasonally late in the year.

 

CASH CATTLE MARKETS LOWER

 

Cash cattle markets Monday were $4 to $5 per cwt lower at $110 to $111 on a live basis after trading $3 per cwt lower last week in a range from $114.50 to $115.50 with most at $115.  No dressed-basis activity was reported Monday but last week was $181 to $183, down $3 to $4.

The USDA’s choice cutout Monday was $1.06 per cwt lower at $198.42, while select was off $1/23 at $192.34.  The choice/select spread widened to $6.08 from $5.91 with 80 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Friday was $144.30 per cwt, down $1.81.  This compares with the Aug settlement Monday of $139.15, down $0.77.