Agrilife: Grilling season kicks off with high but stable meat prices

Texas Crop and Weather Report

A report by Texas A&M Department of Agricultural Economics experts indicated a mixed bag of slight price increases and decreases for beef, pork and poultry throughout grilling season.

Consumer costs for primary beef and pork offerings like ground beef, chuck roasts, sirloin steaks and pork chops are expected to increase around 1% between May and October, while chicken cuts like boneless breasts are expected to decrease by more than 2% during the same time.

The Summer 2024 Meat Prices report was authored by Simon Somogyi, Ph.D., director of the Weston Agrifood Sales Program and Dr. Kerry Litzenberg Sales and Economics Endowed Chair in the department. Report co-authors include David Anderson, Ph.D., professor and Texas A&M AgriLife Extension Service specialist - livestock and food product marketing; Yong Liu, Ph.D., assistant professor; and Weifang Liang, a doctoral student - all in the department.

Somogyi said prices continue to remain near historic highs, but market trends are showing lower retail costs for consumers compared to last year. Consumers should expect a price spike as the Memorial Day holiday weekend kicks off grilling season that typically peaks with Fourth of July celebrations.

"Prices may spike and fluctuate that first month of grilling season due to higher demand from people eating at restaurants and cooking out at home," he said. "But prices should stabilize after that."

Price expectations are averaged across the U.S., and Somogyi said retail prices will be heavily influenced by location and price discounting like grocery specials.

Meat markets stabilize before grilling season

The price forecasts reflect market dynamics across beef, pork and poultry products typically purchased for summer cookouts, Somogyi said.

He attributed the anticipated price increases for ground beef and chuck roast to the seasonal surge in demand during summer grilling season. Beef consumption increases historically during this period, pushing prices upward.

Ground beef continues to benefit from consistent consumer demand, particularly in the fast-food sector, Somogyi said. Lean beef wholesale prices have surged higher on declining supplies while ample supplies of fed beef remain available.

Total meat supplies are expected to decline compared to last year with production increases in chicken and pork not fully offsetting reduced beef production, Somogyi said.

Beef production has declined 2% compared to this time last year, he said. That reduction comes after a 5% dip in beef production in 2023 compared to the same time in 2022.

Meanwhile, the U.S. cow herd is the smallest since 1961. Two years of severe drought in Texas, which accounts for more than 14% of beef cattle nationally, factored into the decline. This means fewer cows are going to market, which in turn puts pressure on supplies and ultimately causes upward price trends at grocery stores.

Ground beef prices were expected to increase an average of 6 cents per pound to $5.19 by October compared to $5.16 in May. Prices have come down about 20 cents per pound since they peaked in November, but still remain higher than the pre-pandemic price of $4.50 per pound in April 2019.

No surprise price spikes expected

Pork chops were expected to follow a similar retail price trend, Somogyi said. They are expected to increase a few cents per pound on average as the pork industry has faced challenges over the past year. These challenges include rising input costs that led to the worst industry-wide losses in 25 years.

Somogyi expects those mounting losses for producers to constrain pork production and supplies, adding to the upward pressure on prices for consumers.

However, he sees a divergent trend with chicken prices, particularly boneless breasts, due to poultry production efficiencies and stable feed costs. Prices for boneless chicken breasts were expected to decline from $4.06 per pound to $3.91 per pound on average.

Somogyi said the poultry industry has more agility to react to market demands, including production costs and supply chain improvements that are favorable for consumers. The sector has also been diligent in battling Avian influenza.

Broiler chickens grown for meat take around six weeks to produce compared to 22-26 weeks for swine and 12-14 months for a cow to reach processing weight.

"I think the key takeaway is from where prices are now and the forecast report is that prices are relatively stable," he said. "Most categories are at or near historic highs but factors like falling feed prices and lower input costs are helping mitigate future price spikes or rocketing prices like we've witnessed for some meat categories in the past few years."

ROLLING PLAINS

The district averaged more than 1 inch of rain. There were varying amounts of wheat rust in a few counties due to moisture. Wheat was nearing maturity and baling was winding down. Some days of sunshine and dry skies would help allow time for producers to prepare fields for cotton and Sudan grass planting before wheat harvest begins. Cattle were in great shape from the spring wheat pasture grazing, and all livestock drinking sources were in good shape going into the warmer months.

SOUTH PLAINS

The district received rainfall that ranged from trace amounts to half an inch. Wheat grain was in the soft dough stage and early applied spring pre-emerge was starting to break loose in irrigated ground. Some wheat was being baled or chopped for silage. Alfalfa was starting to grow and fill in. Producers were battling resistant kochia and other missing weeds from preplant burndown. In most areas, producers were also doing maintenance on irrigation systems, including pumps, pivots and drip systems. Corn was being planted behind the wheat coming out.

PANHANDLE

Widespread showers fell late in the week, but significant amounts of rain were needed to adequately replenish evaporating soil profile moisture. Corn and cotton planting continued. Some fields of headed wheat and triticale in the soft dough stage were being chopped for silage, especially those fields affected by two suspected new plant diseases that, according to observations, had been widespread. Wheat harvest begins in the next few weeks. Native pastures started to green up due to soil temperatures increasing. Overall soil moisture reported from short to adequate. Pasture and range conditions reported from very poor to fair.