The latest CPI data indicated that food and beverage inflation in the US remains muted, up only 1.4% in October. Indeed, there continues to be a lot of speculation as to when the rise in wholesale prices will catch up with the US consumer and what will be the reaction to it. In the case of meat protein, consumer prices already have responded and, in some cases, are sharply higher than a year ago. The bottom chart shows the year over year increase in the CPI values for beef & veal, pork, chicken and turkey. The sharpest increase in consumer prices has been for pork and for good reason. Pork prices were especially depressed last year and they are now back to long term trend levels.

The October CPI for pork was up 12.8% from the previous year and since 2001, pork prices are up 25%. Beef and veal prices also have bounced back and in October were reported to be 7.3% higher than the previous year. Turkey prices are discussed about once a year in the popular press and this is the time to talk about them.

Source: Steve Meyer and Len Steiner, CME Group