More meat price declines forecast, but chicken looking up

Ample supplies of beef and an expected rise in pork production will keep retail prices for both proteins on a downward path in the coming year, USDA’s Economic Research Service (ERS) predicted in its 2017 Food Price Outlook.  Beef and veal prices paid by consumers declined 6.3 percent in 2016 as the increased pace of cattle slaughter, especially during the second half of the year, and higher carcass weights resulted in higher year-over-year beef production. ERS predicts beef and veal prices will decrease an additional 2.5 to 1.5 percent in 2017. Retail pork prices fell 4.1 percent in 2016, largely due to ample supplies of other animal proteins, particularly beef, available for domestic consumption. With USDA forecasting a 5.1 percent increase in pork production in 2017, large pork supplies are expected to drive retail prices 1 to 2 percent lower this year, ERS said.  Retail chicken price inflation remained relatively low into 2016 partly due to an increase in broiler production. The strong U.S. dollar also kept more broilers on the U.S. market, weighing on retail chicken prices.Poultry prices declined 2.7 percent in 2016. However, as the industry recovers from lower 2016 retail prices, ERS predicts poultry prices will rise between 2 and 3 percent in 2017.