Market Outlook

 

Livestock, Dairy, and Poultry Outlook: March 2021

Summary

 

Retail Prices for Animal Products Generally Higher in 2020 Than 2019

The U.S. Department of Labor’s Bureau of Labor Statistics (BLS) collects retail price data and calculates consumer price indices, or CPIs. CPIs are used to measure both inflation in general and groups of consumer purchases. The average values of all CPIs between 1982-1984 equaled 100; the more a current CPI exceeds 100, the higher the inflation for that category since the early 1980s.The overall CPI was 255.7 in 2019, and in 2020 it was 258.8, a 1.2-percent increase. The CPI for food was 258.3 in 2019 and 267.2 in 2020, a 3.4-percent increase. Note that the 2019 and 2020 food CPIs are each higher than the overall CPI for both years. Food-price inflation since the early 1980s has been higher than the overall inflation rate.

The Bureau of Labor Statistics also publishes national average prices for a number of foods, including ice cream, a gallon of whole milk, cheddar cheese, whole chickens, eggs, and an array of beef and pork cuts. The USDA’s Economic Research Service uses BLS beef- and pork-cut prices to create composite values for retail Choice beef and retail pork. The price growth for all seven of these products exceeded the overall inflation rate.

Dairy had the two lowest price increases, 2.3 percent for ice cream and 3.6 percent for cheddar cheese, and the highest price increase, 9.3 percent for a gallon of whole milk. Whole-chicken prices increased by 4.5 percent and pork by 4.8 percent. Eggs and beef had price increases of 7.9 and 8.1 percent.

Beef/Cattle: The first-quarter beef production forecast was lowered from last month on slaughter disruptions caused by weather events that gripped the Plains in mid-February. However, a shift in fed cattle slaughter from the first quarter and into the second, along with higher expected cow slaughter in the first half, more than offset that decline. As a result, the 2021 beef production forecast was raised to 27.6 billion pounds. Because of the weather disruption to packing facilities in February, fed cattle prices lacked support from the cutout and remain unchanged from last month. January beef imports totaled 224 million pounds, down 8.1 percent from a year ago on the lowest shipments from Australia since 2005. The 2021 annual beef import forecast was revised down due to anticipated low shipments from Australia and New Zealand and greater beef demand competition from Asia. Beef exports in January totaled 246 million pounds, up less than 1 million pounds year over year, reflecting robust exports to China. The first-quarter forecast for beef exports was unchanged from last month at 750 million pounds.

See the LDP Outlook.