Any discussion of today’s meat industry situation must begin with a sobering preamble concerning the challenges we face. The U.S. cattle inventory is at its lowest level since 1951, and nearly 35 percent of the contiguous United States is gripped in unrelenting drought. At the same time, the pork sector is suffering heavy losses due to Porcine Epidemic Diarrhea virus (PEDv), and country-of-origin labeling (COOL) costs are squeezing margins as everyone makes the changes necessary to accommodate the onerous rules now in effect.
These troubles have caused retail prices to be on a steady incline, reaching what are now historic highs, even after adjusting for inflation. Pork prices in July 2014 were up 10.9 percent from a year prior. Beef and veal prices increased 10.4 percent in the same period. The USDA Economic Research Service’s most recent estimates indicate this upward trend will likely continue, at least until the weather ameliorates.