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Factors affecting beef and cattle producer prices movements
Marta Norton
Producer prices for beef and veal rose 16.3 percent in October 2003, the largest monthly gain since April 1975. October slaughter cattle prices exhibited the largest monthly gain since January 1974, rising 20.4 percent. The index for beef and veal was the primary accelerator for the 2.0-percent gain in the finished consumer foods index, which, in turn, was a major force in the 0.5-percent jump in overall prices for finished goods. The increase in prices for slaughter cattle heavily influenced the index for crude foodstuffs and feedstuffs to climb 7.8 percent and push crude good prices up 2.6 percent.1
The October gains, while more substantial than earlier movements throughout the year, were not complete anomalies in 2003. Prices for beef and veal generally advanced in prior months, moving up as much as 7.3 percent in June. (See chart 1.) Likewise, 2003 prices for slaughter cattle posted several noticeable gains, increasing 9.1 percent in January, 5.7 percent in August, and 11.4 percent in September. In addition, the U.S. case of Mad Cow Disease discovered in early December 2003 promised more price movement. This article investigates the influences behind 2003 price movements for beef and veal and slaughter cattle indexes by reviewing the trends and recent developments in the industry.
This excerpt is from an article published in the May 2005 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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Footnotes
1 All indexes mentioned are
seasonally adjusted except slaughter cattle (wpu0131) and beef and veal
(wpu022101), neither of which have been seasonally adjusted since 1993 and 1996
respectively.
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Large meat, grain supplies cut recent food price increases.—Jan. 1982.
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