Price of Meat at Lowest in 3 Years

If spring warms the hearts of backyard barbecuers, they have another reason to rejoice: Meat prices are at their lowest levels in at least three years.

“There will be some very attractive prices for this grilling season. We already are seeing it on some major chicken, beef and pork items,” said Jim Robb, an economist for the Livestock Marketing Information Center. “I think they will be pretty darn attractive through the balance of the year.”

On average, he said, retail beef and pork prices are at three-year lows, and chicken prices are the lowest in four years.

Particularly low priced are chicken leg quarters. A slowdown in exports has created a supply glut and led supermarkets to price them to sell -- in some cases less than 20 cents a pound, Robb said.

U.S. meat sales increase in the spring and summer as the warm weather moves food preparation from kitchen stoves to backyard grills.

Government figures show that over the last 10 years U.S. per-capita meat consumption on average increased by 1.3 pounds in the second quarter from the first quarter, Robb said.

But what’s good for shoppers is not so good for meatpackers. Two of the largest recently said the huge supply had damaged their bottom lines.

The nation’s top pork producer, Smithfield Foods Inc., said Friday that its fourth-quarter earnings would be down sharply from the year-earlier period because the abundance of meat has hurt its hog and pork businesses.

On Monday, No. 1 U.S. meat producer Tyson Foods Inc. reported a $127-million loss for its second quarter ended April 1, blaming oversupply in its beef, chicken and pork operations in addition to plant closures.

Meat companies have blamed the large meat supply on the deadly bird flu overseas, which has blunted demand for U.S. poultry meat, and on the continued lockout of U.S. beef by some importing countries that are worried about mad cow disease.

Outbreaks of avian flu in Europe and Asia have cut chicken consumption and hurt U.S. exports of chicken, which normally account for about 15% of domestic production.

Japan and South Korea continue limits on U.S. beef because of the mad cow disease cases here. Before the bans, which started in late 2003, the two countries were leading buyers of U.S. beef.

Meat companies had expected those markets to be reopened by now. South Korea has said it hoped to start buying U.S. beef soon.

“There is too much meat. We are just producing too much of it,” said Todd Duvick, a research analyst for Bank of America. “Avian flu is the contributing factor, but it is not the primary factor.”

The U.S. Department of Agriculture forecasts that beef production will be up nearly 5.5% this year, pork production up 3% and chicken production up more than 2%. Combine those production increases with the large supplies of meat in U.S. warehouses and supplies should remain large, analysts said.

Domestic meat consumption has remained strong, but it is not at the level of a few years ago.

“The high-protein diet craze of the past couple of years has faded,” said Rich Nelson, an analyst with the agriculture analysis firm Allendale Inc.