Egg Prices Hit Record in U.S. After Bird Flu `Supply Shock'by
Gain in September of 0.8% was slower than previous month
Sirloin steak also at record; bacon rises; chicken falls
U.S. retail costs for eggs and boneless sirloin steak rose to records in September, defying an increase in meat and poultry production and a broader trend for below-average food price inflation.
Egg prices climbed 0.8 percent to $2.966 a dozen from the prior month after jumping 15 percent in August, data from the Bureau of Labor Statistics showed Thursday. Costs have surged 51 percent since May when they touched a low for the year.
The major underlying factor for the rally is the outbreak of bird flu in the Midwest earlier this year, which led to the deaths of 48 million birds including egg-laying hens and turkeys. While there have been no new cases of avian influenza reported since June, poultry farmers are still trying to rebuild their flocks.
“That’s a pretty significant supply shock to the entire system,” John Anderson, deputy chief economist at the American Farm Bureau Federation in Washington, said in a telephone interview. “It’s not necessarily something that you recover from overnight.”
Red meat and poultry production will climb 2.7 percent to 94.4 billion pounds in 2014 and by 3 percent next year, the USDA said on Oct. 9.
Boneless sirloin steak rose 1.9 percent to a $8.864 a pound last month. In contrast, ground beef dropped 0.8 percent to and roast beef fell 1.5 percent, with prices for both at their lowest since late 2014. Beef production is expected to increase in 2016 for the first time in six years as cattle herds expand following prolonged drought in the southern U.S.
“We look like we’re sort of topping out on retail beef prices,” Anderson said. “In the wholesale market over the last month or so, prices have weakened quite a bit. We haven’t gotten that on retail yet, but it’s on its way.”
Globally, the trend is for cheaper food. A glut in commodities from grains to milk sent the August index of 73 prices tracked by the United Nations’ Food & Agriculture Organization to the lowest since April 2009. On Sept. 25, the U.S. Department of Agriculture said “food at home” costs this year will increase 1.5 percent to 2.5 percent, trailing the 20-year average.
Chicken prices in the U.S. fell last month, according to the data released Thursday, with whole chicken and boneless chicken breasts at their lowest in at least two years. Bacon prices, on the other hand, climbed to the highest in almost a year.