CBS News – While consumers gear up for all the end-of-year celebrations, they are also shelling out more for that holiday ham, roast or turkey.
Meat prices across the board have moved higher in 2014, led by record highs inU.S. beef prices. Cattlefax, an information and analysis service, notes the USDA’s retail beef price rose to a record high of $5.96 a pound in October.
“Whether you’re looking at retail, wholesale or from a live animal standpoint, we’re at record highs or have been recently in all of those categories, across the supply chain,” Cattlefax analyst Lance Zimmerman told CBS MoneyWatch.
Steve Meyer, livestock market analyst and president of Paragon Economics, says that through October of this year retail prices on all fresh meats were up around 12.4 percent, compared to the same time period a year ago.
A number of factors are behind the jump, but the main issues appear to be weather, disease and demand.
In terms of weather, the ongoing drought in parts of the U.S. — including the years-long, historic drought conditions in the agriculturally-essential state of California — have lowered grain and forage production, which in turn has made feed for chickens, pigs and cows more costly. The lack of feed has also forced many cattle ranchers to dramatically reduce the size of their herds.
Disease has been a major issue for the pork industry, as porcine epidemic diarrhea virus (PED) swept through many U.S. facilities and killed off millions of piglets.
While PED is still a threat, pork producers appear to have the virus under control. “Markets are treating PED as something that can be managed unlike last spring and summer when the ‘rumor’ mill was creating grave uncertainty for pork supplies,” Chris Hurt, a Purdue University Extension Economist, said last week inFarm Talk Newspaper.
And according to Hurt, pork prices are expected to come down one percent between now and February — and then rise steadily during the spring and summer.
U.S. poultry production, meanwhile, has been affected by an infertility issue with one of the industry’s largest breeders of roosters.
And then there’s demand. Domestically, according to Steve Meyer, more consumers are looking for protein with their breakfast, as well as in other meals — which has led to a classic supply and demand scenario. “The lower supplies this year shouldn’t have resulted alone in the high prices that we’ve seen,” he tells CBS MoneyWatch.
U.S.-produced beef, pork and chicken are also in high demand outside of America’s borders. Cattlefax’s Zimmerman says a record-high 11 percent of U.S.-produced beef is being exported this year, while around 20 percent of U.S. poultry and pork ends up overseas.
But Zimmerman adds American consumers should take comfort in the fact that there should be more available meat supplies in 2015.
“That should not only make chicken prices much more affordable, he said, “but it’s also going to put some pressure on these record-high beef prices that we saw this year.”
