Dive Brief:
- Beef and pork prices are expected to decline while poultry prices rise in 2017, according to the U.S. Department of Agriculture's Economic Research Service (ERS).
- Beef and veal prices will likely decrease 1% to 2% in 2017 after producers expanded herds in response to lower feed costs and better drought conditions in Texas and Oklahoma, USDA ERS economist Annemarie Kuhns told Supermarket News. Pork prices are also expected to dip up to 1% next year after prices soared following the outbreak of the porcine epidemic diarrhea virus (PEDv) in 2014.
- USDA ERS anticipates poultry prices to increase by 2% to 3% in 2017, as they are expected to recover from price declines due to the bird flu outbreak last year.
Dive Insight:
Pricing fluctuations come down to a wide variety of factors. These include wholesale prices the value of the U.S. dollar, retail overhead costs such as front-line labor, and oil and electricity prices. Significant changes to the prices of any of these factors could eventually trickle down to impact the final costs of these meats for manufacturers, retailers and consumers alike.
USDA ERS also points out that its predictions are based on typical weather conditions. These price predictions could change if the industry faces another disease outbreak or weather-related setback.
However, at this point, poultry price predictions could be problematic, depending on which price indexes the agency uses to examine past and current poultry prices. Last week, the Georgia Department of Agriculture announced it would not publish its weekly Georgia Dock poultry price index.
This move, a first for the agency after years of releasing the industry-generated pricing benchmark, came after long-held concerns about the Georgia Dock's accuracy peaked in recent months. Several poultry companies currently face a lawsuit regarding claims of pricing manipulation in relation to the industry's self-reported Georgia Dock index.