Last week, USDA Economic Research Service (ERS) released their estimates of monthly average retail meat prices for November. According to this data, beef prices continue to edge higher. Both average Choice and All Fresh retail beef prices rose by about 1% compared with October. The All Fresh retail beef price in November averaged just over $5.01 per pound - the first time this price has surpassed the $5 mark. The all fresh beef price is 4.5% higher than it was last November.
By comparison, both pork and broiler retail prices declined in November compared with the prior month. Pork prices were off by just under 1% from October; however, broiler prices fell rather sharply. The November average broiler composite retail price in November worked out to 195.57 cents per pound. This is a decline of almost 4% from October. That is a fairly sharp drop in a single month. In fact, it is the largest monthly decline in the retail broiler composite price since July 2009. Broiler prices remain above the year-ago level, but not by much - about 1%.
The decline in retail broiler prices is perhaps a little striking in its magnitude, but the fact that prices are declining is not really surprising. Wholesale broiler cut prices have been falling - and falling sharply - for some time now. For example, wholesale boneless/skinless (b/s) breast prices peaked in June at just over $2 per pound but have recently slipped to just over $1.25 per pound. The change in prices on other cuts has not been that dramatic, but all - wings, leg quarters, b/s thighs, etc. - have fallen to below year-ago levels over the past couple of months.
The behavior of wholesale chicken prices raises questions about demand for that product moving forward. For much of the year, retail demand appears to have been pretty strong: the industry has managed to sustain higher year-over-year prices along with increased production. The sharply lower wholesale prices over the last couple of months along with the rapid erosion of retail price in the November data suggest that this may not continue much longer. The prospect of increasing broiler production has naturally raised concerns in the beef sector about a further loss of market share as beef production will almost certainly continue to decline in 2014. If broiler demand is really waning, as it appears to be, beef's prospects for holding onto market share may be improving.
