Meat price measurement matters: How data sources affect farmers' share statistics

Farmers’ share of the retail dollar is not a good indicator of livestock producer well-being. Value additions along the meat supply chain can increase retail prices, which in turn may decrease farmers’ share. However, increases in meat demand—driven by final-product value additions—can ultimately leave livestock producers better off. Regardless, farmers’ share statistics are widely cited by the media and occasionally used in policymaking.

Farmers’ share statistics are calculated by dividing the retail-equivalent price at the farmgate by the price of the end-product at retail. The data underlying retail meat prices and used in farmers’ share calculations are typically obtained from the U.S. Bureau of Labor Statistics. These prices are compiled after BLS data collectors visit retail stores across the country and record the posted price for a multitude of goods, including many meat products.

Retail scanner data offer an alternative to BLS retail meat price data. Unlike BLS data, retail scanner data include quantities purchased at various prices, so quantity-weighted average prices can be determined. This is an important distinction because consumers are more likely to purchase a greater quantity of meat products when they are on sale. Therefore, the average price paid per pound of meat may be less than the BLS observed prices in retail stores.