Meat Costs-My Predictions for the Remainder of the Year
The meat industry has been turned topsy-turvey as of late. Serious drought conditions have adversely affected the beef industry while pig farmers are in a battle with a deadly pig virus. All this equates to higher meat prices for the consumer. So, where are meat prices going? Is there any light at the end of the tunnel?
According to the latest Chicago livestock futures and a few of my other insider connections, here’s my projections on the economic state of the meat industry for the remainder of the year.
Beef: Although some of the drought situation has improved, it’s not quite over. Actually, if Mother Nature doesn’t render a bit more aid, it’s still far from over. Even when the drought subsides, it will take some time to replenish the thinned out cattle herds. Don’t expect beef prices to come down anytime soon. Although an increase in imported beef is helping to overcome our domestic shortages, I still see wholesale beef prices rising as much as 10 percent by year’s end. About the only thing we can do to remedy the beef situation is pray for rain.
Pork: The situation with pork no longer looks as bleak as it did at the beginning of the year. Plagued by the Porcine Epidemic Diarrhea, or PED virus, which is fatal to most piglets, pig farmers are rapidly rebuilding their stock while the virus is on hiatus since it thrives in colder weather. Prices for pork are already dropping as I write this article. I anticipate pork prices to eventually stabilize and be comparable to the same time last year.
On another positive note, the USDA recently issued a conditional permit for a PED vaccine. While it’s welcome news for pig farmers, there’s no guarantee to the vaccine’s effectiveness since it’s yet to be tested outside of a research lab.
Chicken: Chicken is holding its own. The meat gods have been kind to the poultry industry for quite some time. I see chicken prices remaining stable throughout the year. My only concern is the increased demand for chicken from overseas, especially China. Although large producers like Tyson and Cargill are investing heavily in overseas production facilities, I don’t completely trust some of those corporate fat cats. As long as overseas demand doesn’t grab-bag into our domestic production, chicken should be fine.
Fish & Seafood: For the most part, the fish and seafood industry is healthy. Of course, the world of seafood involves a wide spectrum of species. Due diligence and frugal shopping is necessary in order to find a reasonable price. While some species are in abundance, others are not. Shrimp, for instance is recovering from a disease that reduced the crustacean’s availability, while lobster is plentiful. Fish has benefited from an increase in farm-raised varieties which in turn helps keep supply steady with demand. Despite an occasional spike in prices of certain species, I feel that seafood and fish prices will generally remain stable for the immediate future.
Disclaimer: The above predictions are based on the current state of the respective industries as a whole. While demand can be estimated, supply, not so much. Will the pork industry rebound and remain healthy? When will beef return to normal? Until these questions are answered, expect a slight increase in all meats as consumers make a run on the lesser priced varieties, thus driving prices upward.
Hold on just one minute!
Since I wrote this article, a few developments have surfaced that may change things.
Russian President Vladimir Putin signed a decree to establish restrictions on imports of agricultural products from countries that have imposed economic sanctions on Russia as a result of the ongoing situation in Ukraine. A spokesman for the USA Poultry and Egg Council (USAPEEC) confirmed that poultry is included on the list of banned food products.
If all that chicken is no longer heading to Moscow, where will it go? One could assume it’s staying right here. If that’s the case, won’t it saturate an already well-stocked market? An oversupply of chicken might mean a significant decrease in price. After all, Russia is the second-leading market for U.S. chicken, in terms of volume which is valued at $303 million. That’s a lot of chicken.
Yet, The National Chicken Council believes the ban will have no impact on the industry. They released the following statement:
“We do not expect that a Russian ban on U.S. poultry imports will have a great impact on our industry. The biggest impact, we believe, will be on Russian citizens who will be burdened by higher prices for all food products, especially meat and poultry.”
Only time will tell, but keep an eye on poultry prices and be prepared to stock up. I may be doing my Thanksgiving shopping early.
Photo © Alexei Poselenov|Dreamstime.com
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