Meat prices can generally be expected to continue rising for the foreseeable future, as western production regions recover from drought that imperiled feed supplies, although cattle herd rebuilding may bring some relief for beef shoppers, according to the U.S. Department of Agriculture (USDA) Economic Research Service (ERS).
Pork prices remained high in July, edging up 0.7 percent from the previous month; pork prices were also up 10.9 percent from a year ago, the USDA reports. The increase in pork is partially due to the presence of porcine epidemic diarrhea virus (PEDv) in the U.S. supply, as well as a higher cost of pork imports from European producers. Higher hog weights have partly offset smaller herd sizes, however; ERS now predicts pork prices to rise 6.5 percent to 7.5 percent this year, and 3 percent to 4 percent in 2015.
Beef and veal prices have continued to rise, increasing 0.4 percent from June to July; prices are up 10.4 percent year-over-year, due to herd sizes being at their lowest level since 1951. But while pasture conditions have started to improve in the West, there aren't yet any signs of herd expansion. Most retail beef prices, on average, are at record highs, even after adjusting for inflation. ERS now predicts beef and veal prices will increase 6.5 percent to 7.5 percent in 2014.
As a result of higher pork as well as beef and veal price inflation, ERS has also increased its 2014 estimates for the meats, poultry and fish category to 4 percent to 5 percent, and for the meats category to 5 percent to 6 percent.
In July, cattle prices rose 5.6 percent and were up 30.7 percent since this time last year; wholesale beef prices rose 5 percent on the month and 26.5 percent year-over-year. ERS now predicts wholesale beef prices to increase by 10 percent to 11 percent over the same time period. If pasture and water conditions continue to improve in the West, herd expansion would be expected toward the end of the year, which would exert downward pressure on cattle prices. Wholesale pork prices rose, increasing 6.6 percent in July and were up 28.4 percent since this time last year. Hog prices are rising as U.S. supplies decrease because of smaller litter rates caused by PEDv. ERS predicts that wholesale pork prices will increase 10 percent to 11 percent in 2014.