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1998 Pork, Beef Prices to Seesaw at Supermarket

Shifting meat prices may give consumers a bargain on pork this year while beef prices rise slightly, said a University of Georgia economist.

"Increasing pork supplies and decreasing beef supplies will affect both meats at the supermarket," said John McKissick, an extension agricultural economist with the UGA College of Agricultural and Environmental Sciences.

"Through 1998, we'll probably see a slight drop, about 3 percent, in retail pork prices and about a 2 percent rise in retail beef prices," he said.

Though shoppers may find bargains in the meat case, McKissick said the price changes probably won't appear at restaurants.

"When you pay for service, too, you probably won't see a change in menu prices, even at fast-food restaurants," he said. "It takes a really substantial change to see price differences at restaurants."

Meat prices are cyclical, McKissick said. Pork prices fluctuate over a four-year cycle, beef over eight to 10 years.

Whatever the meat, the cycle is the same. Supply increases, so prices to farmers drop. As prices drop, farmers sell more animals, further decreasing the price. Finally, the price drops below the cost to raise the animal, and producers stop selling and begin increasing the number of animals they raise. At that point, the supply decreases, and prices begin to rise again.

"During the cycle, prices to farmers and the retail price of meat are roughly in concert," he said. "When prices are low to farmers, the price at the grocery store drops, too, because of the increased supply."

Because of high hog prices in 1996 and 1997 and lower feed prices in 1997, McKissick expects farmers to produce at least 8 percent more pork this year. That increased supply will make retail prices drop.

"Even efficient producers will have a hard time making money in 1998," he said, "and that's if feed prices remain at the current levels."

For beef producers, the situation is almost the reverse. Decreasing supplies will boost prices to farmers and at the grocery store.

"I expect 1998 will be an improved year over 1997 for beef producers," McKissick said. "Again, lower feed grain costs and a change in supply have made the difference. But for beef farmers, it's a good change."

For both meats, McKissick said shoppers will notice the most change in more expensive muscle cuts -- steaks and roasts. "Ground products will probably not reflect as much change," he said.

Price changes will affect competition at the meat counter, too.

"If the price of pork and poultry are down, shoppers may choose those instead of pricier beef," McKissick said. "The market has its way of putting a lid on increasing prices.

"When consumers aren't buying beef at increased prices," he said, "the market will balance it out, and prices will drop back to where people are willing to buy the product."

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