US Broiler Retail Prices Down

US - Last week, USDA Economic Research Service updated their monthly retail meat price data. Retail broiler prices were down in April, writes John D. Anderson, Deputy Chief Economist, American Farm Bureau Federation.
calendar icon 30 May 2014
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The all-fresh retail beef price for April was reported by ERS at 549.6 cents per pound. This is a little over three per cent higher than the previous month's record level. The average retail pork price in April was reported as 395.0 cents per pound, also up a little over three per cent from the March price. Compared to a year ago, both the all fresh beef and the pork retail prices are up by about 13 per cent.

In contrast to the performance of beef and pork, retail broiler prices headed lower in April according to the ERS data. The retail broiler composite price for April was 192.01 cents per pound - a decline of almost 1 per cent from March. Actually, the retail broiler price is now at its lowest point since last April (when it was 191.20 cents per pound, for the record).

With respect to beef and pork, retail prices have generally moved in the opposite direction from wholesale prices over the past month. For example, the Choice boxed beef cutout averaged about $10 per hundredweight lower in April than in March this year. The pork cutout averaged close to the same in March and April but was steadily declining through the whole month. Not surprisingly, then, the April retail prices reported by ERS were accompanied by higher wholesale-to-retail margins.

For pork, ERS reported a 4.7 per cent increase in the wholesale-to-retail margin between March and April. Still, though, the April wholesale/retail price spread was, with the obvious exception of March, the narrowest since July 2012. For beef, the wholesale-to-retail spread increased considerably more - jumping almost 15 per cent between March and April - but it is still a little below the average of the last couple of years as a percentage of the retail price.

Aside from the fact that retailers probably really did want to see some margin recovery on meat items, another factor working against lower meat prices over the past month was seasonal demand. Moving out of winter into spring, we typically expect to see meat demand improve. This can help keep meat moving at a higher price point.

It will be interesting to see what retail prices do as the summer demand season really kicks into gear. Will strong demand and tight supplies keep retail prices on beef and pork high, or will summer grillers trade down to lower priced items - both within the beef and pork market spaces or outside of them (e.g., boneless/skinless chicken breasts or thighs or drumsticks)? We shall see.

Sarah Mikesell


Sarah Mikesell grew up on a five-generation family farming operation in Ohio, USA, where her family still farms. She feels extraordinarily lucky to get to do what she loves - write about livestock and crop agriculture. You can find her on Twitter or LinkedIn.

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