Jim Long, President-CEO Genesus Inc.
April 24, 2017
U.S. – No Shortage of Meat Protein
The USDA’s latest report of projected U.S. Red Meat and Poultry disappearance for 2017 is 88.751 billion pounds, up 4 billion pounds from 2015 and 2 billion from last year. Profitability and optimism in the Beef, Pork and Poultry Industries have pushed potential U.S. per capita disappearance from 211 lbs per person in 2015 to 217.8 potentially in 2017. A jump of almost 7 lbs per person. Anyone who lives in the fantasy world that vegetarianism is taking over needs to give their head a shake, meat lovers are ever increasing their consumption.
U.S. Beef Production is projected to be 26.564 billion pounds in 2017, up 2.8 billion pounds from 2015. Beef Per Capita disappearance 57.1 lbs in 2017, 54 lbs in 2015.
Pork Production in 2017 26.111 billion lbs versus 24.517 in 2015. Per capita consumption 50.8 lbs in 2017, 49.8 in 2015.
A 4 lb jump in U.S. per capita Red Meat consumption in 2017 versus 2015. Americans are showing their love for Red Meat.
In the same timeframe, U.S. poultry (Chicken and Turkey) 2015 to 2017 projected 2.4 lbs per capita increase.
The rest of the world is realizing the effect of increased U.S. Red Meat and Poultry production. In 2015, the U.S. exported 14.273 billion pounds. In 2017, the USDA projects 16.093 billion pounds. The bulk of this increase is 1.2 billion pounds of Beef and Pork.
The bottom line: U.S. Red Meat and Poultry producers are expanding. They will have more product for domestic consumption and export markets. Expansion will continue until significant losses curtail the enthusiasm of all sectors.
An interesting 2015 paper titled “It ain’t easy eating greens.” Canadian researchers found meat lovers evaluated vegetarians and vegans (plant-based products only) “equivalently or more negatively than some common prejudice target groups.” “Strikingly only drug addicts were evaluated more negatively than vegetarians and vegans,” the authors note.
A recent study in New South Wales, Australia, suggests vegetarian diets won’t prolong life.
Researchers who tracked nearly a quarter-million adults aged 45 and older found no significant differences in all-cause mortality, meaning the likelihood of dying of any death, between those who followed a complete, semi (meat once a week or less), or pesco (fish permitted) vegetarian diets don’t reduce the risk of premature death. This work appears in the journal Preventative Medicine.
The U.S. lean hog prices continue to decline, 53-54% lean hogs $0.5967/lb last week, down from $0.70/lb a month ago, or over $20 per head. A year ago, lean hog 53-54% were $0.67/lb. Lots of hogs coming to market, with daily hog marketings remaining at 443,000 per day, which is packer capacity.
The current hog numbers are continuing to deliver excellent margins to Packers. U.S. carcass cut-outs are $0.7550/lb. 53-54% lean hogs $0.5967. A $0.17/lb spread or $35 per head. Good times for Packers and will be until the new plants under construction come on stream mid-summer. U.S. current lean hog prices of below $0.60 means most hog producers are at best breaking even. If we are going to reverse the negative trend in hog prices, supply needs to seasonally decline (it should). With strong exports and good domestic demand combined with seasonal decline in hog supply, we expect hog prices to reverse soon and push back into the 70s.
Ode to Swine Producers
“Pessimists are usually right and optimists are usually wrong, but all great changes have been accomplished by optimists.” –Thomas Friedman
This post was written by Genesus