US meat industry to face tremendous rivalry this year
Low animal feed costs are supporting the expansion of American beef, pork and poultry industries but the same factor seems to amplify the production in other countries that are some of the biggest meat exporters in the world, concluded two Rabobank analysts consulted by Feed Navigator at IPPA in Atlanta.
According to Christine McCracken, executive director, senior analyst for animal protein, Rabobank, even if meat production in the US is expected to rise this year, the profitability of the businesses depends on a wider access to the global meat market. A new rumour about Washington preparing to reconsider the withdrawal from the Trans-Pacific Partnership (TPP) it looks promising at a time when even NAFTA seems to be at risk, admits McCormack. "If that is the case, that would be very positive", she said.
On the other hand, her colleague, Justin Sherrard, global strategist animal protein for Rabobank thinks that US meat industry is going to face a fierce competition on external markets in 2018 as many of those are accessible to some other big players. Mexico is already reporting an increase in pig and poultry production. China and some parts of Asia are also reporting a stronger poultry production compared with 2016 and the first three months of 2017.
US beef industry is well represented in South Korea and Japan, two markets that are expected to more beef products, but is lacking a trade agreement between Washington and Tokyo. "If we are talking about beef, again the US is strongly competing in Korea and Japan. But Australia is increasing its production, Brazilia is increasing its production and they're also tied to these markets", mentioned Sherrard. For now, the US beef has entered China's market but the industry needs to respond to some prerequisite measures demanded by Beijing, such as traceability systems, in order to perform better, concluded the analyst.
(Photo source: Pxhere)
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