Retail Beef Prices Flatten

By Chad Spearman, Cattle-Fax

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Click here for a graphic of USDA Choice Retail Beef Prices

Choice retail beef prices, as reported by the USDA, have declined from January through May of this year.  Increased beef production coupled with large pork and chicken supplies to start the year have driven beef prices lower.  The average price for the period was $4.02 per pound, which is 4 percent lower than the average price for the same period in 2005 and even with 2004.  The 2006 average price is 9 percent above the five-year average price through May.  The all fresh retail price, which is the combination of Choice and Select product, averaged $3.63 per pound.  This is 1.6 percent less than the 2005 average.

The price decline through May of this year has been contra seasonal.  Even though retail beef prices typically trade in a narrow range throughout the year, they usually follow a seasonal trend.  Seasonal highs generally occur in late spring to early summer when grilling demand is high, and then peak from November to December for the holidays.  In recent years, volatility has increased as retailers reacted to rising wholesale prices.  Since 1990, in years when the yearly average price increased from one year to the next, the Choice retail beef price traded in an average range of 11 cents.  In average price increase years, the price range averages 27 cents.

We have probably seen the peak in retail beef prices for the year.  Retail prices are expected to flatten into early fall, then firm during the fourth quarter.