US pork producers share in upbeat export forecast for 2016

US pork, beef and poultry farmers have been told to expect an upturn in fortunes later this year with the promise of rising exports and fewer imports.

According to a new research report from CoBank, who operate across 50 US states, the “supply glut” that plagued the country’s pork, beef and poultry markets last year is expected to ease in 2016.

“Surprisingly strong US consumer demand has helped lay the groundwork for improving market conditions in the coming year, combined with the fact that the net trade balance is expected to shift toward growing exports and fewer imports,” said CoBank’s animal protein economist, Trevor Amen. “This is welcome news for US pork, beef and poultry producers.”

While this is clearly less good news for competing exporters from elsewhere in the world, the bank’s view is that protein exports can be expected to remain “somewhat of a challenge” throughout the first half of 2016. After that, conditions are predicted to improve over depressed 2015 levels due to the improving price competitiveness of US meat products.”

In looking at individual sectors, Mr Amen said that pork and chicken prices have “upside potential” this year, compared to 2015’s fourth quarter lows. This is based on adjustments being made for future production.

“Of course, optimism for 2016 should be tempered by the oversupply lessons of 2015,” he added. “However, as the market works through the recent protein oversupply hangover, the long-term outlook remains positive, especially with continued global middle class growth.

“The increasing demand for a higher quality diet is likely to provide domestic (US) protein producers with significant opportunities in the next decade.”

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