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 per cent to $2.966 a dozen from the prior month after jumping 15 per cent in August, data from the Bureau of Labor Statistics showed Thursday. Costs have surged 51 per cent 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 per cent to 94.4 billion pounds in 2014 and by three per cent next year, the USDA said on 9 October.
Boneless sirloin steak rose 1.9 per cent to a $8.864 a pound last month. In contrast, ground beef dropped 0.8 per cent to and roast beef fell 1.5 per cent, 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.”
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