Retail beef, chicken, pork prices still climbing

[May 26, 2012]  DENVER (AP) -- The money you're saving on gasoline may go toward buying steaks, ribs and chicken for the barbecue.

Meat prices are expected to rise faster than overall food costs in 2012. Prices rose in the spring and may increase an additional 1 percent to 3 percent this summer. Grill masters will find bargain harder to come by as retailers attempt to recoup some of their higher costs.

Gas prices have dropped about a quarter recently in most parts of the country, which helps consumers. Still, shoppers should look to stock up when they do see sales on burger meat, steaks, chicken wings or pork chops.

Here's what consumers need to know:

HERE'S THE BEEF: Supermarket meat prices have increased because the number of cattle, hogs and chickens dropped last year in the U.S. Blame the weather.

A wet spring delayed corn planting last year. Traders drove up the price of corn futures because supplies were low and demand was robust from livestock producers, ethanol processors and overseas buyers. Corn futures jumped to an all-time high of $7.87 per bushel last June.

Feedlot owners who use corn to fatten up cattle before slaughter felt the pinch. Hog and chicken producers cut back on the number of animals they raised to offset higher corn costs.

In addition, a devastating drought in parts of the country dried up grasslands and ranges where cattle graze. Some ranchers sold off big numbers of animals instead of paying to truck in hay for feed.

In January, the U.S. Agriculture Department said that U.S. cattle herds were the smallest since 1952. Live cattle futures jumped to $1.3115 per pound in February, the highest level in decades. That meant higher costs for feedlot owners and meat packers. And those costs were passed on to consumers.

A scare about a beef additive dubbed "pink slime" and a case of mad cow disease in California seemed to have a limited impact on consumer demand, according to Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC.

Higher corn prices also meant increased costs for hog and chicken producers.

PRICE CHECK: Meat prices are expected to increase 3.5 percent to 4.5 percent in 2012, said Ricky Volpe, an economist with the USDA's Economic Research Service. That is greater than the 2.5 percent to 3.5 percent rise in overall food costs the government is forecasting.

How much of your food budget is going toward meat depends on what type of meat you prefer. Steaks cost about 6 percent more this April than a year ago, USDA data showed. Pork prices were up just 3 percent, while chicken prices jumped 5.3 percent.

At a Denver supermarket on Friday, as Memorial Day weekend kicks off, you could buy a pound of lean ground beef for $4.49. Beef rib-eye steak was $9.99 per pound. Boneless, skinless chicken breasts were $3.49 per pound and boneless pork chops were $4.49 per pound. Using a rewards card could save a shopper anywhere from 70 cents to $3 depending on the item.

Summer prices usually increase 1 percent to 3 percent from the spring as more consumers take advantage of warm weather to grill meat, Volpe said.

SHOPPER BLUES: Shoppers have adjusted to higher costs by buying less beef and pork and more chicken, which is more economical and can be used in a variety of recipes, said Sherry Frey, a vice president at Nielsen Perishables Group.

They're also stocking up when they see sales. And they might use meat in recipes that produce more than one meal or even look for meatless recipes, she said.

A drop in gasoline prices should help. The national average has dropped to $3.67 per gallon from $3.94 since early April That will leave more money in the household budget for food.

"Gas prices, with them coming down, that really breathes life into the summer grilling season if we had good weather without too much rain," Zuzolo said.

[Associated Press; By SANDY SHORE]

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