September 2, 2014

Beef, pork, milk prices high and predicted to climb

Consumers anxious to get out and start the grilling season could be in for a shock at the cash register.

University of Missouri Agriculture Economist Scott Brown says the average price for choice beef increased four percent from January to February to a record $5.58 a pound, and he says signs point to continued increases in beef prices

“When you look at beef production, we’re likely going to be down four percent this year,” says Brown. “I think we’ve gotten to the point where we’re going to be critically low in terms of beef supplies in 2014.”

Brown says lower production isn’t the only factor, though. He says demand remains strong both in the U.S. and overseas, in spite of higher prices.

“Places like China could potentially really drive beef prices higher for us over the next year or two if they decide that they have an appetite for more U.S. beef products,” says Brown.

Pork prices are about 8-cents per pound off of record levels, and Brown says it won’t take much to close that gap. The porcine epidemic diarrhea virus (PEDV) that has impacted hog herds in 27 states doesn’t pose a threat to humans, but is reducing supplies and has driven hog prices to new records.

Brown says consumers might consider stocking up on pork now before prices climb.

“I suspect a lot of consumers going to the grocery store won’t find what they consider a lot of great bargains for pork products,” Brown tells Missourinet, but I would remind them as we go into the summer months I think they’re going to find a lot of these pork products are going to move substantially higher as well given where we are today.”

Milk prices at the farm level have also climbed to record levels, and Brown says that’s a very good situation for dairy producers who have endured several straight tough years. Brown says fluid milk and cheese prices will continue to increase.

“We could see another 20, 30 cents a gallon on fluid milk prices coming in the next couple of months,” says Brown, “and perhaps we’re going to hit record fluid milk prices for consumers in this country.”

Brown says the higher milk prices can also be attributed to high demand, much of it from outside the U.S.

“Places like China, Asia generally … very hungry for milk powders that the U.S. is able to supply,” says Brown. “Over 15-percent of our milk production now being exported … that has been the real driver for these record milk prices.”