Photo: Brian Teutsch, Flickr
Forget the tanking market for a moment.JPMorgan takes a look at what’s happening with margins on meat: AKA “The Meat Spread”
* Chicken discounting seems to be continuing. In May, retail chicken prices slipped and, more importantly, the spread earned by the average retailer on chicken slipped further. We believe that this is the result of grocers featuring/discounting chicken more often (by definition, the more that grocers discount chicken versus more expensive meats, the less $/lb they are making).
Lower prices are not necessarily leading to higher volumes sold; in fact, the bird size most often sold to retailers (4.26-6.25 lbs) continues to see a production slowdown:
* Pork – new all time high retail price. Retail pork prices remained extremely strong, setting a new all-time high. The spread earned by the retailer remained quite robust, as well.
As a per cent of retail beef prices, retail pork prices remained near average levels. As a per cent of retail chicken prices, retail pork prices remain quite high, which explains in part why grocers may be featuring more chicken lately.
* Beef. Like beef, retail pork set a new all-time high in May. Retailers continue to make a solid spread on the product.
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