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.

Poultry and Eggs: The first-half broiler production forecast was lowered, in part on production disruptions caused by a winter storm in Southern States. The broiler export forecast was decreased on expectations for lower demand from China and uncertainty in other key markets. The second-quarter broiler price forecast was increased on recent price movements and expectations for improving demand. The first-half wholesale egg price forecast was increased on higher-than-expected prices as well as expectations for prices to remain firm. The second-quarter table egg production forecast was increased based on near-term expectations for the layer flock and lay rate. The first-half egg export forecast was increased on expectations for continued strong demand. Turkey production was adjusted down on low production and placement numbers in January. Reflecting the lower production expectations, the turkey export forecast was revised down and the turkey price forecast for 2021 was adjusted up to 111.5 cents per pound.

See the LDP Outlook.