Beef, pork and poultry prices are all turning upward this year, according to The Food Institute, and that will take a bigger bite out of consumers’ shopping budgets this year.
Beef, pork and poultry prices are all turning upward this year, according to The Food Institute, and that will take a bigger bite out of consumers’ shopping budgets this year. These three proteins, also known as center-of-the-plate items by food marketers and foodservice operators, account for nearly one-fifth of what consumers spend while food shopping and price changes in these products can influence how shoppers may spend on other items.
Beef is still king when comes to the largest share of what consumers spend on all meat, accounting for almost half, commented The Food Institute. Consumers benefitted from the generally deflationary trend in prices last year when beef & veal prices fell 1% based on government data. But this year, the Department of Agriculture is projecting beef & veal prices will rise 2%. First-quarter 2010 slaughters were said to be the highest since 1997 as an uptick in prices gave beef producers a reason to increase output after some very low-to-negative returns in 2009. In addition, an anticipated 10% surge in export demand for U.S. beef has helped support higher prices for producers. More immediately, as summer grilling season approaches, prices for many cuts will likely be moving upward.
The next largest meat consumers spend on is pork, accounting for just under one-third of the overall meat market basket. Last year, pork prices dropped a pretty significant 2% according to the government’s Consumer Price Index data reviewed by The Food Institute.
That won’t be the case this year, however, as lower hog supplies point to higher prices and USDA projects those prices will be up about 2% from last year – comparably to the increase in prices seen in 2007 and 2008.
This lower U.S. hog production, combined with expected lower U.S live swine imports, points to lower hog supplies later in 2010 and even into 2011 according to USDA. Thus the higher prices.
Look for poultry prices, meanwhile to increase about 2% this year on the heels of last year’s 1.7% gain even as poultry production is seen increasing from 2009 levels. And poultry is just below pork as a percentage of the consumers’ meat purchases, accounting for just under 30%.
The forecast for U.S. chicken broiler meat production in 2010 was recently increased by 375 million pounds to 36.3 billion pounds, 2 percent more than than in 2009. Broiler prices are seen rising about 3% from a year ago.
And turkey production in the beginning of 2010 was running almost 7% under prior year levels, putting even more upward pressure on prices.
But at the end of the day, USDA is projecting that retail food prices as reflected by the Consumer Price Index for Food at Home are seen climbing 3.5% on the heels of only a 0.5% increase last year. But don’t forget that 2009’s small gain followed a big 6.4% jump back in 2008 and the 3.5 gain in prices projected for 2010 is really a return to more traditional food price inflation trends.
And for those of you interested in price trends for food-away-from home, at restaurants and the like, prices are expected to rise another 3.5% this year – the same as in 2009, but down from the 4.4% spike seen in 2008.
TO keep posted about food prices and developments in the industry overall, don’t forget to turn to The Food Institute atwww.foodinstitute.com.