ERS Charts of Note
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Thursday, April 23, 2020
A sharp increase in the wholesale value of beef, along with a modest decline in the value of steers between February and March 2020, produced a larger monthly increase in the farm-to-wholesale price spread for Choice beef than ever before. The farm-to-wholesale price spread calculates how much the farmer receives versus how much the wholesaler receives on a per-pound basis. The price spread increase of 42 cents per pound of retail product in March 2020 was the largest since August 2019 when the spread rose over 36 cents per pound in one month, reaching the all-time high. At that time, a beef plant in Holcomb, Kansas which comprised about 6 percent of U.S. beef packing capacity, had caught fire and shut down, instantly tightening wholesale supplies. The March run-up in wholesale beef prices may be attributed, in part, to an increase in grocery store demand for beef, as consumers prepared to shelter in place due to COVID-19 and supply chains adjusted to stronger retail demand and weaker food service demand. This chart is drawn from the Economic Research Service’s Meat Price Spreads data product.
Thursday, December 5, 2019
Over the last 50 years, U.S. beef production (measured as volume of meat produced) steadily increased by 25 percent, even while the number of cattle destined for beef production decreased by 6 percent. When beef production, numbers of cattle, and average cattle weights are viewed as indices (with a base year of 1970), the trend becomes clear. Since 1970, beef production has increased by roughly 25 percent. Over the same period, however, the number of cattle used in beef production has fallen by 6 percent. The decline in the number of cattle has been countered by a more than 30-percent increase in average cattle weights, driven mainly by increases in the average weights of steers and heifers, which represent 80 percent of cattle destined for beef production. Changes in breeding practices have produced heifers and steers with higher growth rates and higher feed conversion efficiencies in pastures and feedlots. USDA forecasts beef production to reach record levels in 2019 and again in 2020. Both years are expected to surpass the previous record set in 2002, but with 8 percent fewer cattle than in 2002. This chart appears in the ERS Livestock, Dairy, and Poultry Outlook newsletter, released in May 2019. This Chart of Note was originally published June 5, 2019.
Wednesday, June 5, 2019
Over the last 50 years, U.S. beef production (measured as volume of meat produced) steadily increased by 25 percent, even while the number of cattle destined for beef production decreased by 6 percent. When beef production, numbers of cattle, and average cattle weights are viewed as indices (with a base year of 1970), the trend becomes clear. Since 1970, beef production has increased by roughly 25 percent. Over the same period, however, the number of cattle used in beef production has fallen by 6 percent. The decline in the number of cattle has been countered by a more than 30-percent increase in average cattle weights, driven mainly by increases in the average weights of steers and heifers, which represent 80 percent of cattle destined for beef production. Changes in breeding practices have produced heifers and steers with higher growth rates and higher feed conversion efficiencies in pastures and feedlots. USDA forecasts beef production to reach record levels in 2019 and again in 2020. Both years are expected to surpass the previous record set in 2002, but with 8 percent fewer cattle than in 2002. This chart appears in the ERS Livestock, Dairy, and Poultry Outlook newsletter, released in May 2019.
Monday, July 2, 2018
If cheeseburgers are on your menu for July 4, they will cost you 20 percent more than their inflation-adjusted cost from 20 years ago. And that greater cost is due to higher ground beef prices. In 2018, the ingredients for a home-prepared, quarter-pound cheeseburger total $1.69, with ground beef making up the largest cost at $0.92. This same cheeseburger would have cost $0.91 to prepare in 1998, the equivalent of $1.40 in 2018 dollars, with ground beef accounting for $0.55 in 2018 dollars. Today’s higher ground beef prices in grocery stores likely reflect cattle supply disruptions in the early 2000s and early 2010s, resulting in higher-than-average increases in retail ground beef prices during those years. Although U.S. beef production has since increased, prices are slower to retreat at the retail level. In contrast, efficiencies throughout the food supply chain helped lower prices for the other cheeseburger ingredients. Inflation-adjusted retail bread prices between 1998 and 2018 fell by 2.8 percent, tomato prices by 12.3 percent, lettuce prices by 27.9 percent, and cheddar cheese prices by 5.7 percent. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated June 25, 2018.
Wednesday, January 3, 2018
In June 2017, the United States began shipping beef to China after a 14-year absence. U.S. beef was banned from China following the discovery of isolated cases of Bovine Spongiform Encephalopathy (BSE)–commonly known as mad cow disease–in the United States and Canada in 2003. Prior to 2003, China was among the top 10 U.S. beef export markets, but still significantly smaller than leading U.S. partners like Japan, Canada, and Mexico. In recent years, China has expanded its global beef imports and ranked as the second largest global beef importer behind the United States in 2016. U.S. beef shipments to China have grown since June and reached almost 2 million pounds in September alone. While 2 million pounds is less than 1 percent of September’s total U.S. beef exports, shipments to China are expected to grow as more U.S. suppliers receive proper USDA verifications to supply this market. This chart is drawn from the ERS Livestock and Meat International Trade Data product updated in December 2017.
Thursday, November 30, 2017
In every month in 2017, U.S. beef exports exceeded the prior year’s exports, according to the latest trade data through September. Year-to-date beef exports through September total just under 2.1 billion pounds, compared with 1.8 billion during the same time in 2016, a 15-percent increase. Much of the growth in U.S. beef exports can be attributed to increased shipments to Japan, which has received 29 percent more beef so far in 2017, compared with 2016. This rise has amounted to more than 140 million pounds of beef. The growth in U.S. beef exports has coincided with stronger domestic beef production and lower prices relative to recent years. An additional factor that influences U.S. trade, is the relative strength of the country’s dollar compared with its competitors. Between January and September 2017, the U.S. dollar depreciated by roughly 8 percent, according to the St. Louis Federal Reserve’s Trade-Weighted U.S. Dollar Index. A depreciating dollar relative to a trading partner makes U.S. goods more attractive because more dollars can be purchased with the same amount of the partner’s currency. This chart appears in the Livestock, Dairy, and Poultry Outlook Newsletter, released in November 2017.
Wednesday, October 25, 2017
Seasonality of steer dressed weights are largely determined by biological factors and weather-related impacts on animal growth. Seasonally, steer weights tend to increase from the spring months, then decline from late fall into the early spring months. The long-term trend, which has been marked by sustained growth in dressed weights, is due to improvements in cattle genetics through selective breeding and the implementation of modern production systems. For steers, several factors interact to influence year-over-year changes in carcass weights including: producers’ responses to market prices of outputs and inputs (feed and feeder animals); weights and age at which animals are placed into feedlots; and animals’ biological responses to abnormal weather. Steer weights in 2017 are lower than a year ago, driven by aggressive marketing of slaughter-ready animals in feedlots, especially compared to a year ago. This is due to greater profit margins for retail meat packers than in 2016. Still, steer weights remain above their 10-year average, a period in which 2011-13 corn price averaged more than 6 dollars per bushel. This chart appears in the Livestock, Dairy, and Poultry Outlook newsletter released in October 2017.
Monday, May 15, 2017
Increasing global population and demand for food have led to rising agricultural production and demand for land for farming purposes. Expanded agricultural land has often come from tropical deforestation in developing countries that have become major exporters of commodities like beef, soybeans, and palm oil. In Brazil, for example, deforestation is linked most closely with the production of beef in the Amazon basin and the Cerrado region. Historically, cattle account for over 80 percent of deforestation in the Amazon and 88 percent in the Cerrado. At its peak in 1995, beef accounted for 3.75 million hectares of deforestation in Brazil, compared to 0.71 million hectares in 2013. Deforestation due to soybean production has generally remained low, particularly in the Amazon. Soybean production has mostly increased by expanding onto previously cleared cropland or pasture, rather than by contributing directly to deforestation. In more recent years, higher yields and policy changes have contributed to a decline in deforestation rates in Brazil. This chart appears in the ERS report International Trade and Deforestation: Potential Policy Effects via a Global Economic Model, released April 2017.
Thursday, June 30, 2016
If cheeseburgers are on the menu for your July 4 barbecue, they will cost you less this year than last year. Thanks to lower prices for ground beef, bread, and tomatoes, the cost of a home-prepared cheeseburger was 6.3 percent lower in May 2016 compared with May 2015. In May 2016 (latest available prices), the ingredients for a quarter-pound cheeseburger totaled $1.72 per burger, with ground beef making up the largest cost at $0.93 and cheddar cheese accounting for $0.34. This same cheeseburger would have cost $1.83 to prepare in May 2015. Ground beef prices decreased 10.1 percent between May 2015 and May 2016, translating to a $0.10 per quarter-pound savings. Bread and tomato prices also decreased, bread prices fell 5.5 percent and tomato prices 2.6 percent. Cheddar cheese prices increased 1 percent from last May. Lettuce prices, on the other hand, were up 3.2 percent, but due the small piece of lettuce topping the cheeseburger, this translated into an increase of less than a cent per burger. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated June 24, 2016.
Monday, June 27, 2016
Since the late 2000s, India’s exports of beef—specifically water buffalo meat, also known as carabeef—have expanded rapidly, with India moving just ahead of Brazil to become the world’s largest exporter in 2014. India’s beef exports during the period have grown at an annual rate of about 12 percent, rising from an average volume of 0.31 million metric tons during 1999-2001 to an estimated 1.95 million during 2013-15. India’s robust export growth contributed to the expansion of world beef trade during this period and also increased the country’s share of the volume of shipments by major world beef exporters from just 5 percent during 1999-2001 to about 20 percent during 2013-15. The U.S. market share fluctuated during this period but declined from an average of 18 percent during 1999-2001 to 12 percent during 2013-15. This chart is from the ERS report, From Where the Buffalo Roam: India’s Beef Exports, released June 22, 2016.
Thursday, March 10, 2016
The spreads between farm prices for hogs and cattle and retail prices for pork and beef have widened over the past 18 months, leading to a decline in the farmer share of retail red meat prices. Growing cattle inventories and increased pork production are pushing cattle and hog prices lower. For the fourth quarter of 2015, hog prices (51-52% lean) averaged about $45 per hundredweight, down about 33 percent from a year earlier and nearly 50 percent below the prices received in the second quarter of 2014. Similarly, cattle prices (5-market steer price) averaged $128 per hundredweight in the last quarter of 2015, down nearly 23 percent from the fourth quarter 2014. Retail prices for both beef and pork are down as well, but by a smaller magnitude as they tend to adjust more slowly to changes in the farm price due to the wide variety of other costs—including labor, packaging, storage, and transportation—that also contribute to retail prices. This chart is based on the ERS Meat Price Spreads data product.
Monday, January 25, 2016
In 2013, 57.7 pounds of chicken per person on a boneless, edible basis were available for Americans to eat, compared to 53.6 pounds of beef and 43.4 pounds of pork, according to ERS’s food availability data. From 1909 to the early 1940s, chicken availability had been around 10 pounds per person a year, while yearly per-person beef and pork availability had ranged from between 30 and 50 pounds. Chicken began its upward climb in the 1940s, as innovations in breeding, mass production, and processing made chicken more plentiful, affordable, and convenient for the dining-out market and for cooking at home. By 1996, chicken had overtaken pork as the second-most-consumed meat, and in 2010, chicken overtook beef for the No. 1 spot. Beef availability rose during the second half of the last century, peaking at 88.8 pounds per capita in 1976. Pork availability, which had fallen in 2010 and 2011, was up in 2012 and again in 2013. This chart appears in ERS’s Ag and Food Statistics: Charting the Essentials data product.
Tuesday, October 27, 2015
Beef prices typically experience a seasonal decline at the end of summer, but the decline in prices since August this year has been particularly steep, and the combination of abundant supplies and lower demand suggests cattle and beef prices could continue to decline. Cattle are remaining on feed longer and are currently being marketed at record-high weights, resulting in increased beef production this year despite the historically small cattle supplies. At the same time, beef demand is in the midst of its seasonal decline as attention shifts from grilling to roasting items. As a result, wholesale beef prices have declined steadily since late August, while the price premium that Choice beef typically receives over the Select grade is diminishing, reflecting current strong supplies of these higher graded cuts relative to previous periods. Adding to the market pressures, beef exports are down from this time last year due to a strengthening U.S. dollar and softening demand for U.S. beef, resulting in larger-than-anticipated volumes to be consumed in the domestic market and the expectation for continued downward pressure on prices in the near term. This chart is from the October Livestock, Dairy, and Poultry report.
Friday, October 23, 2015
Total U.S. livestock output grew 130 percent from 1948 to 2011, with the poultry and eggs subcategory growing much faster than meat animals (including cattle, hogs, and lamb) and dairy products. In 2011, the real value of total poultry and egg production was more than seven times its level in 1948, with an average annual growth rate exceeding 3 percent. The rapid growth of poultry production is due largely to changes in technology—advances in genetics, feed formulations, housing, and practices—and increased consumer demand. Retail prices of poultry fell in the late 1970’s and 1980’s, relative to beef and pork prices, leading to expanded poultry consumption in that period. Increased domestic consumption and exports were also driven by consumer response to an expanding range of new poultry products, as the industry moved away from a reliance on whole birds and production shifted to cut-up parts and processed products such as boneless chicken, breaded nuggets/tenders, and chicken sausages. This chart is found in the ERS report, Agricultural Productivity Growth in the United States: Measurement, Trends, and Drivers, July 2015.
Friday, October 9, 2015
Since 2009, India’s exports of beef—specifically water buffalo meat, also known as carabeef—have expanded, with India moving ahead of Brazil to become the world’s largest beef exporter in 2014. India’s beef exports grew about 14 percent annually between 2000 and 2015, and are expected to lead major exporters with about 6 percent annual growth during 2015-2025. India’s exports of relatively low-cost beef (primarily to low- and middle-income markets in Southeast Asia and the Middle East) reached a 24 percent global market share in 2015, and that share is projected to increase to 32 percent by 2025. The U.S. share of the global beef market has fluctuated, but averaged 12 percent during 2013-2015, and is projected to rise to 15 percent in 2025. This chart is based on data and analysis from USDA Agricultural Projections to 2024.
Friday, September 11, 2015
Historically, nearly all livestock were bought and sold in large, public markets where hundreds of buyers and sellers would compete for the best price based on the information that each brings to the market. These cash transactions resulted in prices and pricing information that were freely available and shared widely through public and private sources. Beginning in the mid twentieth century, the industry evolved and became more concentrated and coordinated at all levels. The use of cash markets declined sharply in favor of various forms of price contracts, such as forward contracts, marketing agreements, packer ownership, and formula pricing—where a cash price might be used for reference but premiums or discounts are applied based on a pre-determined formula. In the beef cattle market, the last decade has seen a shift away from cash market sales in favor of formula pricing, which has led to concerns that the cash prices used in those formulas could be unreliable, and that the limited volume of public sales undermines price transparency and market efficiency. The Livestock Mandatory Price Reporting Act was passed in 1999 in response to these and other concerns, and requires all major meatpackers to report the prices they pay for sheep, cattle and hogs, as well as their selling prices for lamb, beef and pork. This chart is from the ERS report, Mandatory Price Reporting, Market Efficiency and Price Discovery in Livestock Markets.
Thursday, July 2, 2015
When shopping at the meat counter this Fourth of July, consumers may notice differences in prices per pound compared to last year. A pound of pork chops sold for $3.79 in May 2015 compared to $4.11 per pound in May 2014, a decrease of 7.8 percent. The price of boneless chicken breasts has also fallen, decreasing by 1.9 percent over the last year to $3.41 per pound. In contrast, beef prices are up this year, largely due to drought conditions throughout the Southern Plains and Southwest. Higher feed costs and decreased water supplies forced farmers to shrink their herd sizes to historically low levels in 2014, causing beef prices to rise by more than 10 percent over the last year. On average, consumers are paying $0.28 more per pound for ground beef and $1.23 more per pound for sirloin steak in May 2015 compared to a year earlier. Information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product.
Wednesday, June 24, 2015
Historically small U.S. cattle inventory continues to support high beef prices in 2015, but at least in the short term, increasing imports of processing beef (especially from Australia) and heavy carcass weights have helped moderate some of the price pressures. Fed cattle live and dressed weights have remained significantly heavier than last year due in part to improvements in pasture conditions and extra time on feed as a result of reduced steer and heifer slaughter. One uncertainty is the extent to which feeding cattle to heavier weights will offset the decrease in slaughter numbers in 2015, and the ultimate effect this will have on total commercial beef production. Despite heavier cattle, U.S. commercial beef production is currently expected to fall to a multi-decade low of 24 billion pounds in 2015. U.S. beef production is expected to increase in 2016 due to a rising cattle inventory and continued heavier carcass weights. This chart is from Livestock, Dairy, and Poultry Outlook: June 2015.
Friday, February 13, 2015
Strong feeder cattle prices and declining feed costs are supporting high returns for cow-calf producers. The price of 750-800 lb. feeder steers at the Oklahoma National Stockyards exceeded $220 per hundredweight at the end of 2014, up $65 since January and over $100 since May 2013. At the same time, the price of corn (a major component of cattle feed) fell from above $7.00 per bushel in mid-2013 to under $4.00 per bushel by December 2014, reflecting a record 2014 crop projected at 14.4 billion bushels. Despite weaker demand, beef prices are at record high levels due to tight supplies and historically low cattle inventories. Expanding the cattle herd is a long-term process due to the time it takes cattle to mature, and requires holding some heifers off market for breeding purposes. Recently released data from USDA’s Cattle report suggests that inventories are beginning to grow, and cattle prices have begun to retreat. With corn prices forecast by USDA to average around $3.50 per bushel for the 2014/15 marketing year, returns to cow-calf operators should remain favorable into 2015. This chart is based on data from ERS’s Livestock & Meat Domestic Data and Feed Grains Database.
Thursday, January 15, 2015
U.S. retail choice beef values climbed through 2014, reaching a record high of $6.30 per pound in November. Retail value is defined as the average value at the grocery store of a basket of beef cuts, measured in cents per pound of retail weight. In November 2014, retail values were about $1.00 above the highs reached in 2013 and roughly $1.50 per pound above the previous five-year average. The sharpest jump in month to month prices in the past 5 years occurred between July and August 2014, when prices increased $0.29 per pound. Higher retail beef prices reflect increased cattle prices due to historically low cattle inventories and cattle being held off the market for breeding purposes as growers attempt to rebuild herds. The pace of slaughter has also slowed as feedlots take advantage of lower feed costs to hold cattle back longer and raise them to record high weights. U.S. beef production is forecast to decline further in 2015, indicating that retail prices are likely to remain high. This chart is based on data from Meat Prices Spreads that was last updated December 17, 2014.