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ERS collects data on livestock and meat prices from other USDA
agencies, the Bureau of Labor Statistics
(BLS), and commercial information sources to calculate retail,
wholesale, and farm values for beef and pork.
Retail Prices
In 2002, ERS began providing monthly average retail price data for selected cuts and aggregate categories of beef, pork, poultry, lamb, and veal, based on electronic supermarket scanner data. The database contains meat-cut categories that correspond to BLS meat-cut categories and provide an alternative way to estimate retail prices. (This alternative process was mandated by Congress in the Livestock Mandatory Reporting Act of 1999.) Along with the BLS
categories, the ERS database includes price data on additional
cuts, information on volume sold, and the discount effects of featuring.
(An April 2003 Amber Waves
data feature contains a few examples on how meat prices respond
to featuring and season.) For more information and the data, see Retail
Scanner Prices for Meat, which is housed at Colorado State
University's
Livestock Market Information Center
(LMIC) as of October 2004.
Legislative authority for mandatory reporting lapsed briefly in 2004, but President Bush signed legislation (P.L. 108-444) extending the program through September 30, 2005. The Livestock Mandatory Reporting Act was renewed in late 2006, extending mandatory livestock price reporting until September 30, 2011 (P.L. 109-296). ERS committed resources to the purchase of scanner data in the summer of 2007 and is working with LMIC to generate and publish these data. LMIC has focused on filling in the missing months of data and is publishing these on its website as they become available.
BLS also publishes average retail prices for selected meat cuts.
Scanner
data standard table 1 presents average retail prices for selected
meat cuts from both BLS and the supermarket scanner data. BLS collects
prices from a larger number and greater variety of outlets, but
they do not collect data on sales volume.
Price Spreads
ERS
develops price spreads for beef, pork, broilers, turkey, and
eggs as a measure that describes the allocation of the consumer
dollar among the various stages of marketing in the livestock/meat
industry. The measuring points are the farm, wholesale,
and retail levels in the marketing chain. The farm and
wholesale prices are from USDA's Market News, and retail
prices are from BLS. Prices from these sources are standardized
to reflect 1 pound of meat at the retail level. Meat
Price Spreads are reported monthly for total (farm to
retail), farm to wholesale, and wholesale to retail.
Beef
values and price spreads measure the value
of a Choice steer at the farm, to the packer, and
when sold through grocery stores.
Pork
values and price spreads measure the value of a slaughter hog
at the farm, to the packer, and when sold through grocery stores.
Both tables show values for the current month, the previous 12
months, the last 12 quarters, and the last 6 years. A historical
series contains many more years of data on price spreads for
beef, pork, chicken, turkey, and eggs.
Price spreads can be volatile and may reflect lags in price response
at the farm and retail levels due to price changes. Lag lengths
may vary depending upon whether prices are going up or down and
depending upon expectations about future price changes.
Price spreads on a current-dollar (nominal) basis show long-term
increases over time. Marketing expenses reflect costs of labor,
utilities, facilities, and non-livestock materials such as packaging.
The cost of these items tends to follow inflation. After accounting
for inflation by deflating beef and pork price spreads by the Consumer
Price Index, deflated price spreads do not show much of a trend
over the long term. Some studies suggest that economies of size
gained in meat packing have been passed back to the farm, thereby
raising livestock prices above what they would otherwise have been
absent of consolidation.
More information on price spreads can be found in U.S.
Beef Industry: Cattle Cycles, Price Spreads, and Packer Concentration (April 1999);
in the Agricultural Outlook article, Controversies
in Livestock Pricing (December 2002); and in Beef
and Pork Values and Price Spreads Explained (May 2004).
Related ERS Products
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