Meat prices lag inflation as volumes decline

Dive Brief:

• Meat prices were up by 7.6% in August compared with the same period last year, to an average of $4.65 per pound — a level that was significantly below the overall rate of food inflation recorded during the past 12 months, according to a report released last week by 210 Analytics and IRI.
• Prices for chicken and turkey were up by more than 18% year-over-year as measured by the pound — the highest rate among all types of fresh meat — while fresh beef and pork prices inched up at annual rates of less than 1%.
• Meat inflation has been trending downward throughout 2022 even as across-the-board food prices have pressed ahead at a steadily increasing pace.

Dive Insight:

The cost of meat has emerged as somewhat of a bright spot in a year when relentless price increases have battered the economy and raised fears that a recession may be unavoidable.

Meat inflation ticked up slightly in August compared with the 7% rate seen the month before, but prices in the sector are tamer than food prices as a whole. The U.S. Bureau of Labor Statistics’ food-at-home index for August hit a 13.5% annual rate, the fastest pace since March 1979. The closely watched metric has touched a higher level every month on a year-over-year basis since May 2021, when it was a benign 0.7%.

The price for a pound of fresh pork moved forward in August at a year-over-year pace of just 0.2%, the slowest rate among all kinds of fresh meat, according to 210 Analytics and IRI’s report. Fresh beef edged forward at a 0.4% annual rate during the month, while fresh exotic meat prices increased at a 1.8% yearly clip.

While fresh meat prices were mostly up in the single digits in August, the story was different for processed meats. Packaged lunchmeat prices soared 24.2% per pound last month compared with where they were a year ago, while costs for processed chicken and sausage bulked up by more than 15% and frankfurter prices rose by 11.3%. On the other hand, smoked ham prices rose by only 5%.

Prices for refrigerated plant-based meal alternatives, meanwhile, barely changed in August from their level during that month in 2021, per the findings. 

Food retailers sold less meat in August than they did a year ago even as rising prices pushed total sales for fresh and processed meats ahead by 7.5% year-over-year, to $6.6 billion. Volumes were down 2.9% during the month, the biggest decline since the second quarter of 2021, when grocers were lapping sales against the peaks they recorded during the early weeks of the pandemic.

The decrease in the amount of meat sold in August ended a pattern recorded earlier in the year that had seen monthly volumes move toward their level from a year earlier, according to the report. The decline is attributable to the reduction in the number of meat products available for sale, which was down 3.3% in August compared with the same period in 2021.