Peoria, IL - The nation's pork producers, struggling with a supply glut, are getting the lowest prices in almost 30 years for their livestock. But the farmers contend grocers are making big profits nonetheless by selling overpriced chops, roasts and sausages.
Pork farmers are starting to put retailers around Chicago, the nation's third-largest market, under pressure to help the farmers growers bring home their share of the bacon. They want grocers to lower store prices, which would encourage people to eat more pork and increase demand for the meat.
The prices farmers got for hogs fell 39 percent in the 12 months ending Sept. 30 and have fallen further since, the U.S. Agriculture Department said. But the government estimates that retail pork prices have declined only 1.5 percent.
“Consumers should be aware that hog prices are low enough to create some bargain pork prices,” said Dennis Vercler, an Illinois Farm Bureau spokesman.
To that end, volunteers for the Farm Bureau and the Illinois Pork Producers announced Tuesday they will track pork prices in supermarkets around Chicago and compare them with wholesale prices.
Whole hogs, for instance, were selling for about 18 cents a pound this week, presenting farmers with losses of $20 to $50 per hog. In a Chicago supermarket, butterfly-cut pork chops were selling at $6.08 a pound, with other chops ranging in price from $2.79 a pound to $5.19 a pound.
But USDA economist Annette Clauson said the price gap between wholesale and retail takes time to narrow.
“Look back to 1996, when (farmers) were receiving record prices for their hogs. Retail food prices only went up 9.9 percent,” Ms. Clauson said. “Your retail prices never go up as much as your farm or wholesale prices.”
And supermarket groups such as the Illinois Retail Merchants Association and the Washington-based Food Marketing Institute noted that retail prices also must reflect costs for slaughtering, processing and shipping.
Consumers also tend to buy pork when it is on sale, the trade groups say.
But a nationwide glut of beef, poultry and pork has forced slaughterhouses, flush with supplies and running at record capacity, to lower their asking bids and allowed supermarkets to reap the rewards, leaving producers out of the equation.
The glut came after farmers boosted production, betting incorrectly that world demand would rise sharply this year. The plan was short-circuited by major economic problems abroad. The rise of large-scale hog farms also contributed to the problem.
Iowa is the nation's largest hog state, with about 18,000 producers, followed by North Carolina, Minnesota, Illinois, Missouri, Indiana, Nebraska, Oklahoma and Ohio.
Unlike other commodity growers angry over low prices, hog farmers won't be protesting or picketing, said Vercler, the Illinois Farm Bureau spokesman. He was careful to choose his words, saying he does not want to alienate retailers.
“This is not a protest. Farmers and retailers are partners,” he said. “It's not about price-gouging or bashing the middle man, but there is a difference of opinion about the proper level of retail pricing.”
Meat Industry Insights News Service
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