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National Restaurant Association - Pork prices down, but chicken flies high

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Pork prices down, but chicken flies high

Restaurateurs can expect some relief in the price of pork as producers increase supply, but the cost of poultry should remain high due to increased demand, industry experts say.

“Pork prices are beginning to return to normal, thanks to the stabilization of the pig virus outbreak that plagued producers last year,” said restaurant commodities expert John Barone. “The virus still exists, but two things are happening right now: first, there are two vaccines that seem to be working to a degree. Second, it looks as though the sows that contracted the virus and passed it along to the piglets in their litters have developed some type of immunity that may be preventing the spread of the disease.”

According to Barone, resistance to the virus is resulting in bigger herds and lower prices.

“The numbers are going in the right direction,” he said. “We’re expecting a good amount of pork supplies by the second half of the year and prices are forecast to be down double digits percentagewise.”

Barone added that the U.S. Department of Agriculture is indicating pork prices are forecast to average 18 percent below 2014 levels.

Hudson Riehle, the National Restaurant Association’s senior vice president of research, said higher wholesale food prices last year put pressure on operators and relief this year would be welcomed.

“The intensity of the pressure related to higher wholesale food prices has been easing for some operators as prices on certain commodities seem to be moderating,” he said. “But, because overall food costs have increased for several years, prices in general remain elevated. The impact on operators can vary depending on what’s on their menus. For example, beef prices are expected to advance, but pork costs are likely to drop. That will give operators something of a break for now.”

Barone noted that poultry production is on the rise and prices are reflecting the increase. That could change, however, if demand grows.

“Chicken could result in a bit of a tug of war this year,” he said. “There will be a lot more supply, but also a lot more demand. Because of the high cost of beef, anybody who can use chicken for every [limited time offer] out there is going to. Operators last year couldn’t get enough given the increased demand resulting from the high prices of beef and pork. They couldn’t even plan LTOs that required additional chicken volume, especially on chicken breast. This year, there’s going to be extra availability and more demand, but the price ‑ because of that demand ‑ is going to be close to year-ago levels.”

In 2014 poultry prices averaged around $1.12 per pound, according to USDA estimates.

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