RubinBrown Food & Beverage Update 2015

Commodity Pricing: Major Livestock, Dairy, and Eggs

Disease and Drought Played a Big Role in Price Swings From July 2010 though October 2014, the price of a dozen eggs rose approximately 60.6%, from $0.71 to $1.14 per dozen, or an annual rate of 11.8%. From October 2014 through June 2015, however, the price of a dozen eggs nearly doubled to $2.01 per dozen, in large part due to the outbreak of avian flu that reduced the number of egg-producing chickens. The price for cattle steadily increased from $0.59/lb in July 2010 to $1.21/lb in August 2014 (+105.1%), before declining 6.6% to $1.13 over the last 10 months. The increase was primarily due to the drought conditions in Texas and California over the period, meaning less grass for grazing. As a result, the price of hay nearly doubled, leading to higher cattle prices. Going forward, the price of beef should remain more stable, or slightly decrease, as Texas has enjoyed above-average rainfall this past year; however, there is no apparent end in sight for the California cattle industry. The price of pork was relatively stable from mid-2010 through mid-2013. Beginning in mid-2013, the outbreak of the PED virus sent the price of pork to period highs, reaching $0.93/lb in July 2014. Since the virus was brought under control, record production of hogs has resulted in a significant decline in the price of pork, from $0.93/lb in July 2014 to $0.60/lb in June 2015. The sharp decline in the price of pork has contributed to much of the decrease in the PPI for meat processors, lowering the overall PPI for food manufacturers.

Price Received – Major Livestock, Dairy, and Eggs

$0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00

Source: USDA National Agricultural Statistics Service

Cattle, Cows ($ / LB)

Chickens, Broilers ($ / LB)

Hogs ($ / LB) Milk ($ / LB)

Eggs ($ / Dozen)

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Food & Beverage Industry Sector: 2015 Mid-Year Update

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