The sharp fall in calf prices last fall left consumers wondering when they’d reap those benefits at the retail counter. It’s taken a while but it appears beef prices are headed down at the grocery store. David Anderson is a Texas A&M Agrilife economist.
“The direction was what we kind of thought. Lower prices, because we’re expanding production. We’re growing our cow herd nationwide in response to drought recovery and the record high prices of 2014 and 2015.”
Anderson says that calf prices declined much faster than most people expected.
“At retail, for beef prices, beef prices finally started responding and coming down as supplies grew, but came down much slower than the live animal side does. I think that’s pretty common for what we normally see and expect that there’s a time lag. There’s a delay there. You know if you think about it if you were selling those products and the price you’re buying it for starts to go down, if you don’t have to cut your price yet, that’s good for you right?”
Anderson says consumers started to get a little more relief at the end of last year.
“It all works together but towards the end of 2016 I think we started to see that ramp up a little more where retail beef prices were declining a little faster compared to the year before, so there’s some catching up going on in the market I think.”
Last year set a new record for overall meat production and Anderson believes that will result in retail prices continuing to fall.
“And when I say meat, beef, pork, chicken, turkey, lamb, when you put all those categories together we had another record in 2016, We’re going to have another record in 2017. In fact, I think we’re going to be pushing 100 billion pounds of meat production. In 2018, I think it’s even going to even be bigger than 2017. So as we hit record supplies, overall that should mean lower prices.”