Higher retail prices for meat expected

Wednesday, September 10, 2008 | 9:55 p.m. CDT; updated 11:58 p.m. CDT, Wednesday, September 10, 2008

COLUMBIA - Steeper increases in the retail prices of beef, pork and poultry are forecast for the next five years, according to a new report from the MU Food and Agricultural Policy Research Institute.

The rising prices are a complex issue with several contributing factors. The growing demand for corn, including the production of ethanol, has continued to push up the per-bushel price. Costlier corn, in turn, has increased feed costs for the livestock industry.


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After substantial price increases in 2002 and 2003, increases in the average price of retail beef slowed to 17.5 cents per pound between 2004 and July 2008. But the research institute forecasts it could easily jump 64 cents per pound by 2013.

The average retail price of pork is forecast to increase 43 cents per pound between 2009 and 2013, compared to a 21-cent per pound increase from 2002 through July 2008.

The average retail price of broiler chickens, commercially raised chickens typically under 13 weeks of age, increased 13 cents per pound from 2003 to July 2008. The average price is projected to rise as much as an extra 25 cents per pound by 2013.

The institute's estimates exhaustively account for domestic market trends and policies, such as the passing of The Food, Conservation and Energy Act of 2008. Mike John, director of Beef Marketing for MFA Incorporated, said corn-based ethanol is getting unfairly targeted for its share of contribution to the increases.

"It is an issue, but just one of the issues," John said.

Increasing costs to corn growers for inputs such as petroleum, phosphorous and nitrogen have been offset by the increasing demand for corn, John said.

The demand for meat has not seen the same sudden boost, leaving livestock farmers paying more on one end than they can make back on the other, he added.

The report also addresses the future of ethanol production. Corn-based ethanol will remain the dominant, with production increasing annually. Cellulosic ethanol, an ethanol that can be extracted from a range of plant fibers, will account for roughly 2 percent of the nation's ethanol production.

One category the report predicts will remain somewhat consistent is the price of oil.

"More ethanol production does reduce the price of fuel," said Patrick Westhoff, the research institute's co-director and co-author of the recent agricultural analysis.



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