Analysts are watching trends in the Consumer Price Index and what they might mean for meat demand going forward.
Looking at the latest CPI data, released in December for the month of November, the Livestock Marketing Information Center says it showed a 6.8% increase from last year to 277.9 for All Items.
“November marks the fastest rate of growth for the CPI since June 1982, which rose 7.1%,” the center said. “Although the rate of growth is the fastest in nearly four decades, it is still below levels seen during the late 1970s and early 1980s which were well above 6% and several months recorded double-digit growth.”
The Food CPI grew by 6.1% to 285.5, which was the fastest rate of growth since October 2008. Meat and poultry led much of the increase.
“Much of the growth in Food CPI is likely driven by surging meat and poultry prices as indicated by the Meat and Poultry CPI,” the center said. “The Meat CPI continued its double-digit growth with November 16% above last year to 316.5. During the pandemic the Meat CPI grew 16.7%, which is still below growth rates of the late 1970s which reached into the 20% range for several months. The Poultry CPI grew 8.4% to 267.5 which is just below the increase of 8.7% in June 2020 during the pandemic.”
Meat prices illustrated this overall price increase.
“November Choice retail beef prices were $7.85 per pound, which eased slightly (5 cents) from the prior month’s record high of $7.90,” the center said. “… Retail pork prices continued to climb in November, reaching $4.82 per pound, which marks the eighth consecutive month that retail pork prices have set a new record.”
Poultry prices also reached record levels again. With the latest CPI data showing some of the highest growth rates in decades, the marketing center says consumers are feeling the record meat prices, and inflation could impact meat demand in 2022.
“November retail pork and poultry prices reached record levels again while retail beef prices were the third highest on record,” the LMIC said. “As the holiday season is right around the corner and 2021 draws to a close, consumers are likely starting to feel the effects of inflation and record high meat prices. Moving into 2022, inflation will continue to be in the forefront and likely pose as a headwind for meat demand.”