Supermarket food inflation slowed last month, though retail beef prices remained on pace for the largest increase in seven years and pork was on track for the biggest jump in 15 years, a reflection of smaller herds and robust demand from China and other top export markets.
Average retail beef and veal prices last month rose 9.8 percent nationwide compared with November 2010, according to updated Consumer Price Index data released Dec. 16 by the U.S. Bureau of Labor Statistics. Retail pork rose 6.9 percent in November, an acceleration from the 5.9-percent increase posted in October.
Meat prices soared this year as severe drought withered pastures in the Southern U.S. Plains, helping send the nation’s cattle numbers to an all-time low. Slaughterhouses were forced to bid more aggressively for shrinking supplies of fattened animals, sending cattle prices to a record high last month. Hog prices also hit all-time highs, thanks in part to China’s purchases of U.S. pork surging almost five-fold this year.
Retail beef prices rose by an average of 10.1 percent during the first 11 months of this year compared with year-earlier levels, according to CPI data. An increase at that rate for the full year would be the largest since beef prices jumped 11.5 percent in 2004.
Pork prices rose by an average of 8.5 percent each month this year through November, which if sustained would be the biggest annual increase since 1996. Compared to October levels, retail beef and pork prices both rose 0.4 percent.
High beef and pork prices could be troublesome for livestock producers because unemployment remains high, potentially pushing budget-tightening consumers to cheaper chicken. With little prospect of herd expansion ahead, U.S. consumers likely face high meat prices for the foreseeable future, analysts have said.
Among specific cuts, choice-grade, boneless sirloin steak averaged $6.21 a pound nationwide last month, down 1.7 percent from $6.32 in October and up 1 percent from $6.15 in November 2010, according to CPI data.
Boneless pork chops averaged $4.06 a pound, down 2 cents from October but up 23 cents, or 6 percent, from November 2010. Bacon averaged $4.64 a pound last month, up from $4.49 in October but down from $4.70 a year earlier.
By comparison, boneless chicken breasts averaged $3.15 a pound during November, down 5.7 percent from a year earlier.
Milk and other dairy products have also become increasingly expensive this year, partly because of stronger U.S. exports. Average retail prices for dairy and related products rose 8.7 percent in November compared with the same month in 2010, although prices were down 0.3 percent from October.
A gallon of fresh, whole milk averaged $3.56 nationwide last month, down 1.7 percent from October but up 6.9 percent from $3.33 in November 2010.
Broader CPI measures showed costs for food eaten at home fell 0.1 percent last month compared with September, the first month-over-month decline since June 2010, according to the Labor Department. The decline reflected lower prices for most food categories, including fresh fruits and vegetables.
Compared with November 2010, the food at home index was still up 5.9 percent and for the full year was still on track for the biggest increase since 2008.