These data are derived by USDA’s Economic Research Service from raw data gathered by the Bureau of Labor Statistics to support its monthly update of various price indexes, including the Consumer Price Index. Over time, the data have generally covered fewer and fewer meat cuts but USDA still believes they provide a good picture of the weighted average value of a retail pound of product with the weightings being the proportion of the respective carcasses comprised of given cuts.

One historical characteristic of these price series is that they tend to lag behind price changes at the farm and wholesale . That’s logical since higher costs tend to get “passed along” to downstream levels, some retailers and foodservice operations work on long-term price arrangements and retailers/foodservice establishments tend to try to hold the line on pricing as long as possible to avoid conflicts with their customers.

Retail pork prices have set record-highs in each of the last two months, the latest being $3.104 per pound in June. Retail prices for Choice beef and All-Fresh beef (which includes Choice, Select and store-grade product) rose to $4.491 and $4.09/lb., respectively, in June — both within 3.5 cents of their all-time highs — and are almost certainly headed for records as last year’s small calf crop comes to market in 2011. The average turkey price in June was $1.471/lb., less than 1 cent below its record high. Only the composite broiler price has lagged but it has increased by over 6 cents/lb. in the past two months and is now less than 10 cents/lb. from its record high.

These recent price increases are fundamentally different than those of 2008 which were driven by robust exports that removed product from the US market and by higher transportation and packaging costs driven by record-high oil prices. This year’s increases are being driven by lower supplies resulting from the run-up in feed costs over the past 4 years. It took a while, but producers have gotten chicken, turkey and hog supplies rationalized enough to return the sectors to profitability. Beef isn’t there yet but this year’s cow slaughter and the smaller calf crops to come will get the job done. Consumers pay all costs in the long run.

One contributor to lower US hog supplies has been a sharp reduction in the number of animals coming form Canada. The declines were caused by the appreciation of the Canadian dollar which reversed a competitive advantage for Canadian producers and by the US’s mandatory country-oforigin labeling law which went into effect in 2008. The most dramatic impact has been on slaughter hogs while the least has been on cull sows and boars. The number of feeder pigs coming south continues to fall but will likely stabilize in the area of 75k/wk. if the Canadian breeding herd stabilizes over the next 12-18 months. Most Canadian producers are finally back in the black but there is still considerable financial stress, especially in Ontario, Saskatchewan and Alberta.