More meat and poultry price rises likely, says Rabobank

The report, entitled “Where’s the beef? US protein production to decline sharply in 2012” , said that production could decline by nearly 5% year-on-year by mid-2012, and predicted that global protein supplies may continue to tighten as production lags behind GDP growth. “Barring major economic disruption, Rabobank believes this will lead to another year of record prices in most markets for most proteins around the world,” it said. It estimated that average US fed steer prices this year would be up 18% on last year’s prices – from $96/cwt to $113/cwt. And this could rise still further in 2012, to $116/cwt, it said. Globally, meat and poultry production is in the midst of adjusting to higher, more volatile feed costs, particularly for corn and soybeans – and Rabobank pointed out that there are problems specific to the domestic US market too. Severe drought in Texas, which is home to a quarter of US beef cows, has led many farmers to go into liquidation. The United States could become a net importer of beef “for a while” , Rabobank said. In the near- to mid-term, it said it does not foresee herd rebuilding. Chicken and pork prices are also likely to rise, the report added. The broiler industry has expanded, even during a period when demand is down due to the weak economy. “Cutbacks in broiler production will exacerbate the US protein production shortfall caused by the prospective decline in US beef production by mid-2012,” Rabobank said. As for the pork industry, the report said that supply and demand in this market is more stable, but warned that higher corn costs had impacted the outlook for the year ahead. “2012 hog prices could end up on average 10 percent higher than even the record prices seen in 2011,” it said.

More meat and poultry price rises likely, says Rabobank

US meat and poultry prices are likely to rise next year as domestic production enters a period of sharp decline, according to a new report from financial services provider Rabobank.

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