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Vol. 11, No. 12 / January 17, 2013
Market Comments 14.0% RETAIL BEEF: Y/Y % CH.
12.0% Choice Beef Cuts
Meat price inflation at the retail level was a mixed bag in 10.0% All Beef
2012. In large part, the shifts in retail prices responded to the 8.0%
supply dynamics in the marketplace. Pork values deflated the 6.0%
most while both broiler and turkey retail prices rose by double 4.0%
digits in some cases after three years of flat prices. Below is a 2.0%
brief recap of the latest retail price update: 0.0%
-2.0%
Beef: Retail beef price inflation slowed down in 2012 after double -4.0%
digit increases in 2011. In December, the retail price for -6.0%
choice beef cuts was pegged at $5.1180/lb., 0.7% lower com- 2010 2011 2012 2013
pared to November but still about 2% above year ago levels.
Choice beef prices are almost 20% higher than what they were 20.0% RETAIL PORK: Y/Y % CH.
three years ago but retailers are facing increased resistance in
passing along higher prices to the consumer. In large part we 15.0%
think this is a function of the supply available. Coming into 2012, 10.0%
the expectation was for prices to escalate higher due to significant
cutbacks in cattle slaughter. The number of cattle coming to mar- 5.0%
ket did indeed decline but the cattle that did go to slaughter were
significantly heavier, with total beef pounds only down about 1.2% 0.0%
from the previous year. With beef exports lower and imports high- -5.0%
er, domestic per capita beef disappearance was down only 0.4%.
Choice beef prices since August rose at less than 2% while all beef -10.0%
price inflation has increased by an average 5.3% compared to the 2010 2011 2012 2013
previous year. The consumer shift to lower priced beef items has
been discussed at length and the data appears to support this view
20.0% RETAIL POULTRY: Y/Y % CH.
as well. Beef prices at retail are expected to rise in 2013 but this
will be highly dependent on how supply trends develop. 15.0%
10.0%
Pork: For the most part pork prices at retail have been steady to
lower this year. Pork prices since last May have averaged 1% be- 5.0%
low year ago levels. The December retail pork price was 0.0%
pegged at $3.427/lb., 1.5% lower than the previous month
-5.0%
and 1% lower than the previous year. Note however, that Broiler Composite
pork prices rose sharply in 2010 and 2011 as production increases -10.0% Turkey
did not keep pace with strong export demand, leading to a net de- -15.0%
cline in per capita pork availability. Per capita pork disappear-
ance in the domestic market (a measure of supply availability) 2010 2011 2012 2013
declined 4% in 2010 and 2011 but was basically flat in 2012. The
expectation is for per capita pork disappearance to be somewhat Poultry: The jump in retail poultry prices is due in part to the
lower in Q1 and Q2 of 2013, an expectation predicated on modest ability of broiler producers to reduce supplies. Per capita broiler
slaughter increases (+0.5%), modest declines in weights (-0.5%) disappearance in 2012 declined by some 3%. For all of 2012, broil-
and some increase in export volume. Lower per capita supplies er retail price inflation averaged 10.1%. The December composite
and higher prices for competing items should help push pork retail broiler retail price was $1.9710/lb., 10.6% higher than a year ago
prices higher in 2013 but don't expect the kind of double digit in- and the highest price on record. Producer margins are improving
flation we saw in 2010 and 2011, however. and with higher supplies already in the pipeline, the expectation
is for retail broiler price inflation to moderate in 2013.
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