CME: Retail Price Decline for All Meat Sectors
US - CME's Daily Livestock Report for 16 April 2009.According to USDA’s monthly Meat Price Spreads, released
yesterday, retail prices for all four main meat species fell in March with
the decline in chicken prices being the largest of the group. The data
for 1990 to date appear in the chart at left. The composite retail chicken
price was estimated to be $1.716/lb, down 4.8 per cent from last month’s $1.802/lb.
and 1 per cent lower than the March 2007 price of $1.732/lb.
The all-fresh beef price fell 1.5 per cent from February to $3.947/lb. That
price is 1 per cent larger than last year’s March price of $3.839/lb. Retail turkey
prices fell 2.2 cents/lb. (4.8 per cent) from February. March’s $1.347/lb. was 17 per cent
smaller than last year’s $1.151/lb. marking the largest year-on-year increase
among the four species. Retail pork prices declined 0.7 per cent in March to
$2.942/lb. That is 3.8 per cent higher than one year earlier.
Note that year-on-year reductions of output had a positive impact
on all of the retail prices other than chicken—whose year-on-year output
reduction is the larges of the group. And chicken exports are higher this
year, indicating that domestic availability is even lower than the production
reductions would suggest. None of that speaks well about chicken demand,
a fact that continues to raise some concerns about meat prices in 2009.
After presenting and discussing these data, we have to point out
that we are not 100 per cent comfortable with them — but they are all we have at
the moment. The data, which are accessible through a link here, are based on data gathered by the Bureau of
Labor Statistics as part of its program to estimate the Consumer Price Index
each month. Those raw data include only prices. No sales quantities are
gathered. We fear this results in a systematic overstatement of retail prices
since sale or feature prices usually result in higher sales quantities — or that
darn sure ought to! Computing an arithmetic average, as USDA does with
the BLS data, counts the everyday price and the feature price as equals
when the feature prices should be weighted heavier.
We said “at the moment“ above because Congress authorized
another retail meat price system in the Livestock Mandatory Reporting Act of
1999. That system utilizes scanner-based data that includes FAR more cuts
in each species and sales quantities for each price which allow proper sales
weightings. The prices from this system are much more variable than are
the BLS-based prices. They are also generally lower though year-to-year
moves are often similar. You can see comparisons of the price series at the
Livestock Marketing Information Center’s website. Just click
Retail Meat Prices at the top of the screen.
So why aren’t these data used? Because the most recent data we
have is for April 2008. USDA’s Economic Research Service stopped gathering
the data when the LMRA lapsed in 2006. They went back and gathered
the missed data early last year after LMRA was reauthorized but got only as
far as April ‘08. It appears they have now decided there are better things to
do with the funding that Congress provided for this project and have refused
to update the data since that time even though it appears that the law and all
of its provisions are still in effect.
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