Expect Lower Meat Prices This Holiday Season

Nov 24, 2016

Americans may find more meat on their holiday tables this year, at cheaper prices.

U.S. livestock production is in full swing. Beef and pork together set a new record recently -- commodity analysis firm Urner Barry reported an all-time high of 1.0618 billion pounds of beef and pork produced in U.S. slaughterhouses the week that ended November 19. Meanwhile, Midwest turkey producers have recovered from a massive 2015 avian flu outbreak.

It typically takes a while for changes in commodity or wholesale prices to reach the grocery store, but consumers are now reaping the benefits of an improved situation for livestock producers.

"We've really put the drought of 2011 in the southern Plains and the national drought of 2012 very much behind us," says Lee Schulz, an Iowa State University livestock economist. "When we look at costs of production, we're really the lowest in last 5-7 years."

That has prompted an expansion of the nation's beef herd. Pork production has recovered from a 2014 disease outbreak that caused a price spike, so now both meats are more affordable.

Schulz says increases in competition between beef, pork and poultry mean more families may choose prime rib over ham or turkey.

"With lower beef prices you are starting to see some more advertising in the form of rib roast. I think retailers do believe they can compete with some of those more traditional dishes," Schulz says. "That doesn't mean that we're going to steal all the competition from those, but I think with lower prices for beef you're seeing them able to compete a little bit more with those traditional proteins for each holiday."

At least one Iowa turkey farmer isn't worried. Chris Domino of Early says despite the avian influenza setback last year, which infected five of his nine turkey barns, he's optimistic about the industry. He's also incorporated more rigorous methods to prevent disease in his operation.

"We have a set of boots and a set of clothes for each site, so we don't wear our same clothes inside the buildings as we do outside the buildings," Domino says. "The boots we wear outside we don't wear inside."

Domino and his father added turkeys to a row crop operation so the family farm could support the younger man and his family. That was almost nine years ago, and today, Domino says the turkey business is strong.

"I believe the turkey industry is growing," he says. "I think it's doing really well."

Iowa inched from the ninth to the eighth largest turkey producing state, growing more than 11 million birds this year. Minnesota remains the top turkey state, with other Midwest heavyweights including Indiana (No. 4), Missouri (No. 5) and Ohio (No. 10).

Domino grew the turkeys presented to President Obama this year for the annual Thanksgiving pardon.   

Schulz says even though lower prices can be tough for producers, he expects the meat industry in 2017 to settle into a calmer place after several years of wide price swings. Pork producers are especially optimistic, Schulz says, as the logjam of processing capacity will be alleviated as five new slaughterhouses are planned, and expected to open in the coming years. Two of those will be in Iowa.

"We're kind of at a critical juncture," Schulz says.

Supplies are ample and prices are low. All that remains to be seen is just how much meat Americans will choose to consume.