Retail Meat Prices & Price Spreads
ERS collects data on livestock and meat prices from other USDA agencies, the Bureau of Labor Statistics (BLS), and commercial information sources to calculate retail, wholesale, and farm values for beef and pork.
Between 2002 and 2008, ERS provided monthly average retail price data for selected cuts and aggregate categories of beef, pork, poultry, lamb, and veal, based on electronic supermarket scanner data. The database contains meat-cut categories that correspond to BLS meat-cut categories and provide an alternative way to estimate retail prices. (Congress mandated this alternative process in the Livestock Mandatory Reporting Act of 1999.) Along with the BLS categories, the ERS database includes price data on additional cuts, information on volume sold, and the discount effects of featuring. (An April 2003 Amber Waves data feature contains a few examples on how meat prices respond to featuring and season.)
BLS also publishes average retail prices for selected meat cuts. Scanner data standard table 1 presents average retail prices for selected meat cuts from both BLS and the supermarket scanner data. BLS collects prices from a larger number and greater variety of outlets, but does not collect data on sales volume. Comparing Two Sources of Retail Meat Price Data (November 2009) compares BLS and scanner data, describing the differences between these two data sets and evaluating their relative strengths and weaknesses.
ERS develops price spreads for beef, pork, broilers, turkey, and eggs as a measure that describes the allocation of the consumer dollar among the various stages of marketing in the livestock/meat industry. The measuring points are the farm and wholesale and retail levels in the marketing chain. The farm and wholesale prices are from USDA's Market News, and retail prices are from BLS. Prices from these sources are standardized to reflect 1 pound of meat at the retail level. Meat Price Spreads are reported monthly for total (farm to retail), farm to wholesale, and wholesale to retail.
Beef values and price spreads measure the value of a Choice steer to the farmer, the packer, and the grocer. Pork values and price spreads measure the value of a slaughter hog to the farmer, the packer, and the grocer. Both tables show values for the current month, the previous 12 months, the last 12 quarters, and the last 6 years. A historical series contains many more years of data on price spreads for beef, pork, chicken, turkey, and eggs.
Price spreads can be volatile and may reflect lags in price response at the farm and retail levels due to price changes. Lag lengths may vary depending on whether prices are going up or down and depending on expectations about future price changes.
Price spreads based on a current-dollar (nominal) values show long-term increases. Marketing expenses reflect costs of labor, utilities, facilities, and non-livestock materials such as packaging. The costs of these items tend to follow inflation. After accounting for inflation by deflating beef and pork price spreads by the Consumer Price Index, deflated price spreads do not show much of a long-term trend. Some studies suggest that economies of size gained in meat packing have been passed back to the farm, thereby raising livestock prices above what they would have been without consolidation.
More information on price spreads can be found in U.S. Beef Industry: Cattle Cycles, Price Spreads, and Packer Concentration (April 1999); in the Agricultural Outlook article, Controversies in Livestock Pricing (December 2002); and in Beef and Pork Values and Price Spreads Explained (May 2004).