Source: University of Missouri Extension
U.S. consumers have shown strong demand for meat and dairy; however, with shifts in trade and tariff policies, uncertainties could cloud markets and as one University of Missouri expert points out, if exports falter, supplies will build in this country.
“It is difficult to pin down how much meat and dairy products will go to exports,” says University of Missouri economist Scott Brown.
In a mid-year baseline update for livestock and dairy Brown offers mixed outlooks. Combined per capita pounds of beef, pork, chicken and turkey will be almost 19 pounds more this year compared to 2014. That’s a 9.5% boost. Further, a 3.5-pound increase looms in 2019.
“Producers must hope for strong U.S. consumer demand,” Brown says. People eating more could keep products from piling up in freezers. If not, the growing supply moves through the market chain only with price cuts.
With that uncertainty, farm prices are projected to decline for fed cattle, hogs and chickens, Brown says.
For pork, exports grew 176 million pounds out of a 422-million-pound growth, January to June.
“Weaker pork prices helped move exports,” Brown says.
Increasing sow numbers with high production per sow pushed pork growth up for the last four years. Growth will continue through at least 2020, Brown says.
Exports offset a large part of pork increases. That left per capita supplies at or below historical levels through last year.
Now trade doubts and production growth push domestic pork supplies next year to the highest levels since 1981 and big supplies of beef and chicken will only be competing.
According to Brown, the result could be the lowest hog prices in a decade.
High production in livestock and dairy kept the consumer price index for food below 2% for the fourth year in 2018. The CPI runs less than the rate of inflation.