Most discussions of broiler markets are centered on the wholesale space, but to truly understand consumer-level demand and the category’s competitive position within the protein landscape, a closer look at the retail space is needed.
A possible reason why retail prices do not receive more attention is because data points at this level are “imperfect.” While the Bureau of Labor Statistics conducts regular sweeps of price information for broiler meat and a host of other food products from supermarkets, publicly available price data on the foodservice side is lacking. This is a huge blind spot because of the significance of restaurants when it comes to marketing a wide range of red meat and poultry products.
That said, it is understandable why this information is difficult to collect, especially in a manner that accurately reflects consumer-facing price levels because of the myriad value-added processes associated with marketing food products through restaurants. Nevertheless, the price data gleaned from supermarkets remains an instructive tool for better understanding the choices that consumers face.
Recent retail price trends
The feed cost shock that rocked the U.S. broiler industry in 2011-12 eventually worked its way to consumers, with the composite retail price of broiler meat surging to a then-record average of $1.96 per pound in 2013. That marked an increase of more than 11 percent from just two years prior, a significant upward adjustment for a category historically renowned for its low-cost status. From there, however, composite retail broiler prices stabilized and even retreated a little, falling below $1.90 per pound on an annual average basis during the late 2010s.
The pandemic era kicked off a major shift in retail prices, with broiler meat increasing more than 20 percent between 2020 and 2022. A further, albeit much slower, increase was observed in 2023, which left composite broiler meat prices at a record annual average of $2.46 per pound. Even though spot wholesale prices in this category advanced noticeably last year, average retail prices eased lower a few cents.
Growing relative affordability
While absolute price levels are important to track, they must also be understood in the context of other variables like consumer incomes and the price of substitute or complementary goods.
It is insufficient just knowing that broiler meat is cheaper than other protein categories like beef or pork from an absolute standpoint. Determining whether that relative advantage is changing, and to what degree if so, can perhaps reveal important clues about the future direction of consumer behavior.
The recent trajectory of this relative price advantage has been encouraging for broiler industry stakeholders. In 2010, the average annual composite retail broiler price stood at exactly 40 percent of the average annual composite retail beef price. It declined slowly at first from there, but when beef prices soared in 2014-15, broiler meat’s relative price advantage at retail accelerated and culminated with that ratio falling to just 29 percent in 2021. The broiler-to-beef price ratio at retail rebounded in 2022 but has retreated again over the past two years, putting the broiler category at a huge competitive advantage over beef. Consumers will find that difference difficult to ignore if beef prices persist at sky-high levels.
