US meat industry is threatened by oversupply
Chinese tariffs are seen as one of the elements that could trigger a crisis for the American meat industry, the other one being the increasing supplies in the US, as Chris Hurt, an economist at Purdue University, declared for Drovers magazine.
"I think this year we're talking about the demand will not be strong enough to outweigh the supply increase. We're going to have 4% more beef in the marketplace, 3.5% to 4% more pork, and about 2% more poultry", expressed his concerns Hurt.
At this point, the pressure exercised by the Chinese tariffs on pork has provoked losses at about $12 per head. Still, this is only the beginning of what could turn into a contraction of the pig herd in the US.
"Now again, the losses aren't won't be big enough this spring and summer to force contraction, but as we get into the fall we think and winter time we think we'll see losses $20 to $25 dollars a head. That's big enough to start stopping the expansion, levelling off the herd or maybe even some contraction into 2019", said the economist.
The latest quarterly report from US Department of Agriculture estimates that the US pig inventory stood at 72.9 million head, up by 3% compared with Q1 2017. It is also the largest March pig herd on record going back to 1988, mentions AHDB.
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