Meat prices rise to record levels

Consumers will pay near-record prices for many of the meats they grill this summer. Derrell Peel, livestock marketing specialist at Oklahoma State University, said meat protein prices are “red hot” as the economy continues to open and restaurant demand returns.

“Meat markets of all types are enjoying strong demand. In numerous cases, wholesale prices for specific meat products are at record levels, exceeding the levels provoked by the pandemic disruptions one year ago. Unlike last year, lack of supply is not the issue. Year-to-date production of beef, pork and broilers is higher, not only compared to last year but also higher than 2019 levels,” Peel said.

Since May, broiler chicken breast meat prices have been elevated with wholesale markets at record levels amid the chicken sandwich war underway with several quick-serve restaurant chains. Retail boneless, skinless chicken breasts are selling for $2.97 per pound at Walmart this week.

Peel said higher export demand has also pushed chicken drumsticks and leg-quarter prices up sharply since the beginning of the year. Tyson drumsticks sold at Walmart were selling at $1.76 per pound this week across Northwest Arkansas.

Wing prices have continued to rise, with many restaurants and retailers reporting no wings to sell. Last month, Peel said wing prices surpassed the $3 per pound mark. At retail this week, Walmart has 4-pound wing packs selling for nearly $3 per pound. That’s almost double the typical $1.50 to $2 per pound prices for wings outside of the peak times around the NCAA men’ss basketball tournament and the National Football League’s Super Bowl.

Donnie King, chief operating officer at Tyson Foods, said recently demand in chicken, pork and beef sectors have been solid despite rising prices. He said if prices continue to push higher, chicken is typically the protein that benefits from consumers trading down from beef. King said there is no evidence that this is happening yet.

Peel said the boxed beef cutout price has pushed higher since the beginning of the year, with the middle meats leading the way. Wholesale beef tenderloin and ribeye prices set records in the most recent data, with tenderloin over $17 per pound and ribeye costing more than $13 per pound. Peel explained that tenderloin is almost exclusively a restaurant item while ribeye is popular in restaurants, at retail grocery and for export.

He said strip loins are popular at retail grocery stores, and prices have also increased sharply this year but failed to exceed the pandemic levels from last year. Brisket prices have risen significantly since January, averaging over $7 per pound in May, another indication that barbecue is back. Chuck and round products are also costing more though the increase is less than with the middle meats.

He said end meat demand is driven by retail grocery use for value cuts and ground beef and export demand. The price of 50% trimmings is higher than January but has dropped back from recent peak prices in mid-April. The supply of fatty trimmings is relatively large due to the increased slaughter of heavy-fed cattle. The cost of 90% lean trimmings remains strong, with high demand for lean to match supplies of the 50%. Trimming is mainly used for food service ground beef, Peel said.

Wholesale pork carcass cutout prices have risen steadily all year, pushing past the levels of the pandemic spike last year to the highest values since 2014, Peel said. Pork tenderloin prices have increased since the beginning of 2021 but have remained below the pandemic levels of one year for several weeks. At retail this week, Tyson pork loins sold at Walmart are selling at $3.66 per pound. Pork roasts are priced at $1.94 per pound.

Peel said wholesale ham prices increased from the first of the year until late April and have retreated slightly in the past month. Hams are also a popular export item and pork exports jumped sharply in March.

Pork belly prices peaked recently in April at the highest levels since 2017 and the demand for bacon remains high. Pork spare rib prices reached record levels recently, pushing above $3 per pound for the first time. Spare ribs are often exported but the recent strength in spare rib prices may also be related to a rebound in barbecue restaurants, Peel said.

He said pork cold storage holdings were drawn down sharply one year ago and remain at very low levels. In part, this is likely due to the surge in pork exports to China that began in 2019 and resulted in China being the largest pork export market in 2020.