Shifting meat prices may give consumers a bargain on pork
this year while beef prices
rise slightly, said a University
of Georgia economist.
“Increasing pork supplies and decreasing beef supplies will
affect both meats at
the supermarket,” said John McKissick,
an extension agricultural economist with the UGA College
of Agricultural and Environmental Sciences.
“Through 1998, we’ll probably see a slight drop, about 3
percent, in retail pork
prices and about a 2 percent rise in retail beef prices,” he
said.
Though shoppers may find bargains in the meat case,
McKissick said the price changes
probably won’t appear at restaurants.
“When you pay for service, too, you probably won’t see a
change in menu prices,
even at fast-food restaurants,” he said. “It takes a really
substantial change
to see price differences at restaurants.”
Meat prices are cyclical, McKissick said. Pork prices
fluctuate over a four-year cycle,
beef over eight to 10 years.
Whatever the meat, the cycle is the same. Supply increases,
so prices to farmers drop.
As prices drop, farmers sell more animals, further decreasing
the price. Finally, the
price drops below the cost to raise the animal, and producers
stop selling and begin
increasing the number of animals they raise. At that point,
the supply decreases, and
prices begin to rise again.
“During the cycle, prices to farmers and the retail price
of meat are roughly in
concert,” he said. “When prices are low to farmers, the price
at the grocery
store drops, too, because of the increased supply.”
Because of high hog prices in 1996 and 1997 and lower feed
prices in 1997, McKissick
expects farmers to produce at least 8 percent more pork this
year. That increased supply
will make retail prices drop.
“Even efficient producers will have a hard time making
money in 1998,” he
said, “and that’s if feed prices remain at the current
levels.”
For beef producers, the situation is almost the reverse.
Decreasing supplies will boost
prices to farmers and at the grocery store.
“I expect 1998 will be an improved year over 1997 for beef
producers,”
McKissick said. “Again, lower feed grain costs and a change in
supply have made the
difference. But for beef farmers, it’s a good change.”
For both meats, McKissick said shoppers will notice the
most change in more expensive
muscle cuts — steaks and roasts. “Ground products will
probably not reflect as much
change,” he said.
Price changes will affect competition at the meat counter,
too.
“If the price of pork and poultry are down, shoppers may
choose those instead of
pricier beef,” McKissick said. “The market has its way of
putting a lid on
increasing prices.
“When consumers aren’t buying beef at increased prices,” he
said, “the
market will balance it out, and prices will drop back to where
people are willing to buy
the product.”
