As a slowing economy has led to some decreased sales in meat, the price of meat remains high. Market forces, including devastating droughts, have been building for a while and will likely keep hamburger and steak prices steady and expensive, according to an April CNN Business report. With the U.S.’s experience of extreme drought in recent years, farmers started to rapidly sell cattle because the dry conditions, along with higher feed costs, made it expensive or impossible to maintain their herds. That wave of sales, particularly of cows used to breed, has led to supply constraints this year, according to the report. Beef and steak prices have increased, pork declined and chicken varied from last month to this month. Even with these high costs, plant-based meat prices remain highest of all.
BEEF – Beef and steak increased prices in the last month. Ground beef went from $5.02 per pound in June to $5.10 per pound in July, according to data from the U.S. Department of Labor, Bureau of Labor Statistics. Livestock and wholesale meat and poultry prices were derived from U.S. Department of Agriculture, Agricultural Marketing Service reports. Beyond Beef, a plant-based ground meat product, was priced $8.99 per pound at Target as of last week, according to their website, higher than its meat counterparts. Overall, retail prices for beef in June this year were around 5.8% higher than June last year and were 1.3% higher than in May this year.
“While the monthly increase is partially seasonal, the increase from last year shows that there are other factors at play, mainly the decreasing supply amid resilient demand,” a statement from the National Cattlemen’s Beef Association’s Market Research Team said.
PORK – Pork prices declined a bit. All pork chops went from $4.24 to $4.23 per pound in that same time period. Bacon, sliced per pound, went from $6.22 to $6.23 per pound.
“Pork has faced a multitude of headwinds this year,” the statement said. The largest hurdle likely came from an animal health and welfare regulation in California, Proposition 12, or Prop 12 for short, which prohibits the strict confinement of breeding pigs. A selloff of excess pork in the market has kept prices deflated in the absence of firm demand, the NCBA statement said. Hungry Planet plant-based ground pork was priced at $25.97 per pound at Walmart as of last week, considerably higher than its pork counterparts. Overall, retail pork prices were sitting 4.1% down from June 2022 to June 2023 but are up 0.7% from May to June this year.
CHICKEN – Chicken prices varied: some increases and some decreases. Fresh whole chicken went from $1.95 to $1.89 per pound from June to July; boneless chicken breast went from $4.19 to $4.14 per pound. And bone-in chicken legs went from $1.99 to $2.02.
Daring plant-based frozen chicken breast pieces was priced at $11.88 per pound last week at Walmart. Gardein ultimate plant-based chicken fillets were priced at $8.43 per pound, both still higher than their chicken counterparts. Overall, retail chicken prices were sitting 2.4% lower from June 2022 to June 2023 and are 0.8% lower than May 2023. “This is probably in part due to the recovering supply of broilers, as well as a seasonal softening in demand,” the NCBA statement said.
The reasons why
So, why are all these prices that way? Seasonal shifts throughout the year are a contributing factor. Beef experiences a demand surge during the summer months and during the holiday months in the winter, according to the NCBA. Some of the strongest weeks for beef sales in retail are around Memorial Day, Independence Day and Christmas. “However, there have been other forces at play this year that have caused volatility besides seasonality,” the NCBA said.
Inflation is another calamity. As of July 31, the U.S. inflation rate was at 3.18%, compared to 2.97% last month and 8.52% last year. However, this is still lower than the long-term average of 3.28%. In July 2021, for example, ground beef was $4.38, sirloin steak was $10.53, all pork chops were $4.08 and fresh whole chicken was $1.43. As overall inflation is around 3.2%, at the same time, per capita availability of beef is projected to decline over the next five quarters and expected to be down over 6.5% year-over-year.
“The main question mark at this point is how consumers will respond,” the NCBA said. “Demand has been surprisingly resilient over the past few quarters, which has supported retail prices, but who knows if that will continue since there is still a consensus that there will be an economic slowdown, even if it is not classified as a recession.”
Communicating with shoppers
For traditional meat, one message that the National Cattlemen’s Beef Association has leaned into is educating on the plethora of other, lower-priced beef products that consumers can shift down to from steak. This messaging has received positive feedback and directed some consumers to some lesser-known beef products, the NCBA said. This approach to messaging may be a good option for other proteins as well.
As far as plant-based meat alternatives, a study Good Food Institute conducted with Mindlab found that consumers ranked price as the second-most important factor, behind taste, to encourage or discourage them from purchasing a plant-based food product. According to a Mintel study, among adults who do not currently consume meat alternatives, 20% say high price is a barrier. For most consumers, closing the price gap would likely increase the purchase intent of plant-based products. The largest group of consumers is willing to pay only the same price for plant-based products as for their conventional counterparts. Approximately ¾ of consumers are willing to pay the same price or less.
If you’re accustomed to eating beef, pork and chicken, you don’t have to completely cut it out. A partial shift away from a meat-centered plate can help bring costs down. Encourage shoppers to choose proteins, including fish and seafood, that are on sale. You can also encourage smaller portions of animal-based proteins and encourage them to fill their plates with plant-based foods like beans, nuts, whole grains and other veggies.
Any relief on the horizon?
So, is there any kind of relief expected in the coming months? It depends on consumer demand. Since there is little wiggle room on the supply side for beef, the only real way that prices could decrease substantially would be if consumers stop purchasing this product, according to the NCBA statement. “While we don’t know if this will happen, the previous few quarters have seen resilient demand for beef,” the statement said. “However, there is still speculation that an economic slowdown will come, which may change the calculus for some consumers.”
NCBA’s upcoming webinar
Join Riley Peterson RDN, on behalf of the Beef Checkoff, as she shares compelling ways to communicate the importance of family meals and how this movement impacts the health and wellness of consumers across the life cycle. Turnkey resources, including a consumer menu planner, recipes and a complete cooking class outline will be included to help you provide year-round family meal inspiration for your customers. Register