U.S. retail prices for meat and eggs rose for the seventh consecutive month in July, with bacon notching a record, as the impact of shrinking cattle and hog herds trickles down to the nation’s supermarkets.
The Consumer Price Index for beef, pork, poultry, fish and eggs rose 0.3 percent in July from June on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics said in a monthly report today. Retail prices in that category were up 3.6 percent from July 2009.
Beef and pork producers cut herds as losses swelled after corn surged above $7 a bushel two years ago. Meatpackers were forced to bid more aggressively for declining supplies of slaughter-ready animals, leading to a near-doubling in hog prices over the past year.
The U.S. cattle herd as of July 1 totaled 100.8 million head, down 1 percent from a year earlier and the lowest on record for that date, according to USDA data. Earlier this year, the hog breeding herd, a reflection of future pork supplies, fell to a record low.
As a result, prices at the grocery meat case have risen much of this year, and probably will climb further, analysts say. That’s worrisome for beef and pork producers because unemployment remains high and many consumers may avoid higher-priced foods, such as steaks.
“Meat prices are probably the biggest risk for the consumer, in terms of cost,” Dan Basse, president of AgResource Co., said during an Aug. 12 press briefing at CME Group, the Chicago-based exchange operator. “The meat side of the plate has the prospect to get spicier. The consumer has the most risk of price upside in beef.”
U.S. retail bacon averaged $4.213 a pound during July, up 16 percent from $3.64 a year earlier and a record high, unadjusted for inflation, according to Bureau of Labor Statistics data. The previous record was $4.046 a pound, reached in June.
Boneless pork chops averaged $3.865 a pound last month, up 10 percent from the end of 2009, according to bureau data.
Among beef cuts, choice-grade boneless sirloin steak averaged $5.662 a pound in July, down from $5.997 in June but up 6.6 percent over the past six months. Ground beef prices have jumped 14 percent over the past six months, the bureau said.
Food prices overall have changed little in recent months and retail inflation generally remains subdued, today’s data showed.
For food consumed at home, consumer prices fell 0.1 percent in July from June, and rose 0.7 percent from a year earlier.
Overall, the Consumer Price Index increased 0.3 percent in July on a seasonally-adjusted basis and rose 1.2 percent from a year earlier. Excluding food and energy prices, the CPI rose 0.1 percent in July.