A closer look at the farm-to-retail price spread for beef and pork

We know how the pandemic impacted the beef and pork industry, but now we are getting a closer look at just how much of a gap there is between what we paid and what farmers got paid.

The farm-to-retail price spread is the difference between the cost a consumer pays versus what the farmer receives. American Farm Bureau Federation economist Michael Nepveux says that the pandemic drove beef and pork prices spreads to record levels.

“If you look at the farm-to-retail price spread for beef, in June, it was $5.21 per-pound and that is the highest it’s been ever since the data was collected beginning back in 1970,” he notes. “You see a similar story in pork. So, the farm-to-retail spread for pork hit its record in June at $3.65 per-pound.”

Nepveux says that labor issues in meat packing plants caused the increases: “What we saw back in May and June was a decline in the dollars-per-pound that farmers were receiving for their animals. This was mainly driven by the labor issues that we saw in processing plants. This was basically creating a shortage of beef and pork on the market, so you saw the increase in prices at wholesale and retail levels. But, because you saw a constraint in process capacity, which basically created an oversupply of animals on the market, that’s why you saw the decline in the prices of animals as well.”

Processing capacity appears to be getting back to normal.

“Hopefully, we’re past the worst of it. There still is somewhat of a backlog of animals...Given everything with COVID, it’s hard to speak with any certainty, but I think we’re, at least in terms of processing capacity, mostly relatively back to normal,” he adds.

USDA releases report on boxed beef and fed cattle price spread.

For more information click HERE.