Retail Beef Prices Below Year Ago, Seen Lower

A Bloomberg story says retail beef prices soon will be lower because of an increase in US beef output, but retail prices already are below a year ago, according to the USDA’s Economic Research Service and the Bureau of Labor Statistics.

The average price of beef at the meat case was 590.4 cents a pound in March, down 31.9 cents, or 5.13%, from 622.3 cents in March of 2016.

If the Bloomberg story were projecting prices in April compared with March levels, they might have a case.  Retail beef prices declined from March’s annual high last year as supplies increased.  And, from March through December, they declined in all but two months – June and November.

However, the Bloomberg article would be remiss if it is claiming retail beef prices will compare with previous years.  The March price of 590.4 cents a pound was 49.8 cents, or 9.21%, above the 2011-2015 average of 540.6 cents.

 

COMPETING MEAT PRICES RISING

 

As grilling season encroaches on US consumers, retail grocers were said to be featuring, or planning to feature, more beef as the price spread between beef and its major competitors, pork and chicken, narrowed.

Generally, pork and chicken are cheaper than beef and can be featured alongside of beef, or as “sub-features” for added shopper appeal.  But the gap is narrowing this year as pork and chicken prices rise.

Grocers like to feature beef, market analysts said.  It actually draws consumers in to the stores, where pork or chicken features may not.  Once there, consumers may choose the cheaper meats, but beef ads will pull them in.  And wholesale beef prices have been rising over the last weeks, possibly as orders come in for grilling-season cuts.

Pork and chicken features will make a difference if the price is enough lower than beef, or in the later weeks of the month when many consumers are running low on spendable cash.

Retail pork prices are rising fast.

The average retail price of pork in March was 378 cents a pound, up 13.7 cents, or 3.76%, from 364.3 cents in February and 2 cents, or 0.53%, above the year-ago level of 376 cents.  It was 16.6 cents, or 4.59%, above the previous five-year average of 361.4 cents.

Average retail chicken prices in March were 146.2 cents a pound, down 1.1 cents, or 0.75%, from 147.3 cents in February but almost dead even with a year-ago March’s 146.3 cents.  It was up 2.18 cents, or 1.51%, from the 2011-2015 average of 144.02 cents.

If retail meat features run true to form, they will focus on beef the first weekend with beef/pork features the second two weekends and chicken the last weekend.

 

CASH CATTLE QUIET

 

No cash cattle trading was reported yet this week.  Asking prices are about $130 to $132 per cwt on a live basis and at $210 to $212 dressed.

Only 120 head of Nebraska cattle traded on the fed cattle exchange auction last Wednesday at $120 per cwt on a live basis.

Cattle traded last week in a range from $128 to $130 per cwt live, up $2, and $205 to $208 dressed, up $2 to $3.

The USDA’s choice cutout Tuesday was up $1.86 per cwt at $215.99, while select was up $1.42 at $202.20.  The choice/select spread widened to $13.79 from $13.35 with 86 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Monday was $136.61 per cwt, up $0.49.  This compares with the Apr settlement Tuesday of $138.67, down $0.37.