WATT PoultryUSA - April 2018 - 8
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cerns of rising grain and transportation costs, the latter casting a wide
net over all inputs.
To the contrary, several economists recently surmised that a continued growth in the U.S. economy
should absorb these increases. Total
meat consumption rose in each of
the last three years and is expected
to rise again in 2018. A relatively
weak dollar should help U.S. export
Finally, commodity prices might
rise during 2018, but experts predict
Read more: US poultry regulations remain top concern
for 2017, www.WATTAgNet.com/articles/29607
these will be manageable and should
not disrupt the market.
As for the last three years,
confidence in the poultry industry
was strong again. Concerns about
overproduction dampened the profit
outlook for some, but economists
assured us the U.S. market should
handle the increased output. ■
Greg Rennier, Ph.D., is president of Rennier Associates Inc. To contact Rennier, email firstname.lastname@example.org.
Poultry Market Prospects
BY MARK JORDAN
Domestic supply gains raise
concern for broiler industry
If U.S. production of beef, pork and chicken continues to outpace what can be
absorbed by the export channel and through population growth, domestic per
capita supplies of red meat and poultry could soon reach new heights.
With the Great Recession, two major
feed cost shocks and an outbreak of
highly pathogenic avian influenza -
which did more to disrupt trade than
production capabilities - all becoming
more distant memories, hardship and
frustration are giving way to swelling
optimism in the U.S. broiler industry.
Good reason for optimism
Profit margins in the U.S. broiler
industry were strong in 2017 and
money pouring into the sector in recent
years set off a wave of investment. The
resulting boost to capacity means we
expect U.S. broiler production will increase to 43.2 billion pounds ready-tocook (RTC) in 2018, up about 4 percent
from 41.7 billion pounds RTC in 2017.
Optimists correctly point out that
global demand for meat and protein is
improving - creating opportunities to
export surplus output - and that even
domestic demand inspires far more
confidence now than it did six or seven years ago. This argument perhaps
underestimates the magnitude of current expansion efforts, especially as
we take a step back and examine the
broader meat and poultry space.
Total red meat and poultry production in the U.S. is expected to
increase 4 percent overall in 2018, to
103.0 billion pounds carcass weight
from 99.3 billion pounds in 2017.
The U.S. pork industry is leading the
charge on the growth front with beef
and chicken not far behind.
Global context for the
Supply developments in the U.S.
www.WATTAgNet.com ❙ April 2018