What happens when commodity production rises, fuel costs are lowered, and the US dollar is strengthened? Food prices decline. This is what's currently happening in the meat and diary industry. The United States Bureau of Labor Statistics revealed that meat and diary prices are dropping.
According to their data, meat and eggs, along with poultry and fish, have declined 2.8 percent from August 2015 to February 2017. This is in spite of an overall price increase of 2.8 percent during this period.
Over a 10-year period, the Consumer Price Index of meat and eggs increased 27.9 percent. That means prices have been steadily increasing until now. Meat prices in particular saw their numbers decrease by 8.1 percent during the 2015 to 2017 period.
Of the meats, veal and beef declined by 10.1 percent. Eggs on the other hand declined by a whopping 36.6 percent. That's a huge change in price since their peak in August 2015.
With prices dropping, does that mean consumers will choose to eat more eggs and meat? Not necessarily.
A study published by the Natural Resources Defense Commission in March 2017 revealed that Americans were eating less meat. From 2005 to 2014, Americans consumed 19 percent less beef than usual. The NRDC estimates that reduced the carbon footprint by 10 percent. This is the equivalent of reducing the greenhouse gas emissions of 39 million cars.
Reduced consumption of meat and dairy is believed to help the United States reach up to 74 percent of its projected greenhouse gas emission target by 2020. Beef alone is the highest greenhouse gas intensive food that results in nearly a 70 percent loss in food production efficiency.
If consumers continue to eat less beef and dairy, that means a reduction in the carbon footprint. This as a whole will improve environmental health. What this means for the CPI and agricultural industry will remain to be seen.