Washington - Standing at the meat case at her local supermarket, Mary Jo Lyon felt sick. Her distress was not the meat, but the prices.
Pork chops were $2.50 a pound last week; hams were $1.50. Not surprising, unless you consider that the Fayette, Mo., pig farmer and her husband Ovid had just sold a 615-pound boar for 6 cents a pound and several 250-pound hogs for 11 cents a pound.
“Something is wrong there big time,” Lyon said “Somebody is making a killing but I don't know where.”
As pork producers across the country grapple with an oversupply problem that has maxed slaughterhouses and dropped prices to their lowest levels in 40 years, many are questioning why consumers haven't seen a major drop in prices.
At its lowest levels in December, hog farmers were getting $8 to $10 per hundredweight. That means a 250-pound hog that brought in about $120 a year ago was only worth around $20 to $25.
Prices last week rose to about $25 per hundredweight after the government announced millions of dollars in aid for hog farmers, but the price is still a drastic cut from the $45 to $50 levels of last year.
Farmers say they are suffering while processors and retailers reap the benefits.
“I would say in the last five years, in Colorado, a minimum of one half of hog producers have exited the business,” said John Lang, an Eaton, Colo., producer. “Financially, it won't work. They just aren't able to continue.”
Agriculture Department economist Annette Clausson said retail pork prices have dropped, including a 4.7 percent decrease last year. Another 3 to 4 percent decrease is expected this year, she said.
“The retail price never goes up as much as the farm price would but then it also doesn't go down as much and it takes a longer time (to be affected),” Clausson said. “You don't see the swings in the retail prices for a lot of your meats that you do in the farm prices.”
Clausson said that USDA figures show that a pound of center cut bone-in chops cost $3.39 in December 1997. Last month, that same pound of meat cost $3.03.
Agency figures don't take into account sales promotions at individual grocery stores, Clausson said.
For Juanita Miller, the prices are a real steal.
“I haven't seen pork chops this cheap in a while,” Miller said as she loaded her basket at a Giant supermarket in Upper Marlboro, Md., with four packages of chops at $1.39 a pound. The regular price is $2.99 a pound. “This is too good to be true,” she said.
Prices were similar throughout the Washington region this week. At Giant, the pork roast ends were 79 cents a pound. At Food Lion, picnic shoulder roasts were 69 cents a pound and at Super Fresh, pork spareribs were $1.99 a pound.
Tim Hammonds, president of the Food Marketing Institute, a trade organization representing thousands of grocery stores across the country, said retailers are not taking advantage of pork farmers.
“Retailers recognize that pork producers are in real trouble,” Hammonds said. “They are ... aggressively moving low price pork to consumers. Our prices are reflecting our purchase cost.”
Hammonds and some economists say the oversupply problem will inevitably overwhelm retail demand.
“There are too many hogs,” Hammonds said. “That is not a retailer-driven problem.”
“What we like to think is if retailers would drop the price, we'd move a lot more pork,” said Michigan State University economist Laura Martin. “That's just not how it works.”
Clausson said retail pork prices also reflect additional costs for things like marketing, transportation, packaging -- a statement even the National Pork Producers Association agrees with.
“There's not a direct correlation between prices paid to producers and prices consumers pay,” said association Vice President Dallas Hockman.
Instead, Hockman said his organization is pushing to get grocers to offer pork specials. He said while some retailers are offering pork chops at 88 cents a pound, others are asking for $3.99 a pound.
“All we're asking is for them to recognize the situation we're under,” Hockman said.
Meat Industry Insights News Service
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Phone: 631-757-4010
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