US market to witness competition between pork, beef and poultry
A drop in pork exports coupled with a drop in prices for lean hogs, created by the increased production, could create a vicious circle for the whole US meat industry.
Between the last week of June and now, lean hog carcass prices dropped from $84.05 cwt to $67.39 cwt, while average farrow-to-finish profits fell from $47 per hog to $14. In other words, the US pork industry suffered a horrific July and that is likely to affect beef, according to Sterling Marketing analysts, quoted by Drovers magazine.
The US pig inventory is on expansion phase and so are the figures related to cattle and poultry. Cheap pork abundantly reversed in the domestic market could easily impact prices of beef and poultry products, according to Sterling Marketing analysis.
Sterling Marketing president John Nalivka projects US beef production to increase 3.9% in 2018, and pork production up 4.1%. Additionally, US poultry production is expected to rise 3% this year. Increasing red meat and poultry production means per capita consumption in the US is projected at 222 pounds, the largest since 2007. As pork exports took a direct hit from the current trade war, more pork was available for the domestic market, creating more competition for consumer spending. That comes at a time when both beef and poultry production is increasing. Without any new markets open for this huge amount of meat the prices will tumble fast turning this summer into a nightmare for some producers.
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