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Source

Retail prices are from the Bureau of Labor Statistics (BLS) Consumer Price Index (CPI). Wholesale and farm prices are from USDA's Agricultural Marketing Service. Conversion factors developed by ERS are used to convert retail weight to carcass-weight equivalence.

Scope and Coverage

Data cover selected cuts of beef, pork, and poultry, as well as eggs and dairy products. Price spreads are reported for last 6 years, 12 quarters, and 24 months. The retail price file provides monthly estimates for the last 6 months. The historical file provides data since 1970.

Variables

Variable name Definition
Values
Retail prices Average retail prices for the selected product as reported by BLS, measured in dollars per pound for meat, dollars per dozen for eggs, and dollars per gallon or carton for dairy products
Retail value Average value of the selected cut of meat at the grocery store, measured in cents per pound of retail weight
Wholesale value Average value of the meat as it leaves the packing plant, measured in cents per pound of retail weight
Gross farm value Value of the animal when it is sold, measured in cents per pound of retail weight
Net farm value Gross farm value minus the value of byproducts; represents the value of the meat to the farmer
Byproduct allowance Value of hides, skins, fats, bones, and edible and inedible offal
Spreads
Total spread Retail value minus net farm value
Wholesale to retail Retail value minus wholesale value
Farm to wholesale Wholesale value minus net farm value
Farmers' share Net farm value divided by retail value
Retail to consumer spread (poultry only) Difference between what the retail grocery store pays for the product (wholesale price plus a delivery charge) and what the store charges the consumer
Market prices
5-market steer price (dollars per hundredweight) Average monthly value for the 5-market steer price as published by AMS, measured in dollars per hundredweight live-weight basis
51-52 percent lean hogs (dollars per hundredweight) Average monthly value for 51-52 percent lean hogs as reported by AMS, converted from carcass weight to live-weight basis
All fresh beef retail price (cents per pound) Composite value based on Choice beef, other beef, and hamburger retail prices; developed to estimate the average retail value of total beef production
Wholesale broiler composite (cents per retail pound) Composite value based on wholesale prices for whole birds and chicken parts; developed to estimate the average retail value of all broiler production
Retail broiler composite (cents per retail pound) Retail value of the composite wholesale value for broilers

Methodology

ERS starts with a standard animal in calculating beef and pork price spreads. This standard animal is cut up in a fixed way at the packing plant, and its wholesale cuts are in turn cut up in a standard way at the retail level. The total value of the animal at the farm could be compared with the total value of the animal at wholesale and retail.

ERS calculates its price spreads on a per-pound-of-retail product basis. It takes 2.40 pounds of the standard steer to produce a pound of retail beef and 1.14 pounds of wholesale beef to produce a pound of retail beef. For hogs, the conversion factors are 1.869 pounds of hog per pound of retail cuts and 1.04 pounds of wholesale cuts per pound of retail cuts. The gross farm values in the price spread tables are the farm price of live animals multiplied by the farm-to-retail conversion factor, and the wholesale values are the average price of the animal's wholesale meat cuts times the wholesale-retail conversion factor.

In addition to their meat, cattle and hogs also produce a number of byproducts when they are slaughtered: organs, bones, hides/skins, etc. ERS does not calculate retail values for these parts, but the price-spread tables do include estimated byproduct values at the wholesale level. The wholesale values and retail values are directly comparable. The byproduct value is subtracted from the gross farm value to produce the net farm value. The net farm value is meant to measure the farm value of an animal's meat.

For more detail on how beef and pork price spreads are calculated and how price spread changes affect livestock prices, see Beef and Pork Values and Prices Spreads Explained (May 2004).

The main difference between broiler spreads and those for beef and pork is that there is no farm price. The vast majority of broilers are produced under contracts, where the integrator (poultry slaughter company) usually supplies chicks and feed and pays growers a per-unit fee for the birds they produce.

Last updated: Thursday, July 05, 2012

For more information contact: William Hahn

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