The steadily increasing cost of producing pork has led to the rise of pork prices in the market. This had led retailers, as well as pork producers, to think about what actions to take in order to keep their businesses and still keep their customers.
According to the Steiner Consulting Group, wholesale prices of pork have increased since the past year. For the second week of April, the prices for almost all pork cuts have increased by 1 percent to 21 percent as compared to the same period last year. Altin Kalo, who is an economist at Steiner, said that this increase in price is primarily attributed to the increase in energy costs, as well as the rising cost of animal feed. It is also caused by an increasing demand from the improving U.S. economy, as well as the growth of foreign markets, which have capitalized on the encouraging exchange rates, that have been caused by the weakened U.S. dollar.
Not only pork prices, but Kalo expects beef prices to increase also, by up to 20 % (for choice beef) and 22% (for select beef). With this, retailers are torn between the choice of cutting margins or passing along some of this cost to customers. They have been watching for any changes in the market regarding this concern. For larger grocery stores and retailers, like Supervalu, they are able to shield customers from the high prices of pork by leveraging their scale and size in order to obtain the lowest possible prices.