Prices and drought batter
meat production for 2012
D.C. — Continuing high grain prices will contribute
toward an estimated 5 percent drop in beef and poultry
production next year, according to a recently released
report titled Where’s The Beef? from Rabobank International.
meanwhile, are weathering higher feed prices well enough
to keep production levels at about the same level as
this year. What it means is higher prices overall for
retailers and consumers.
major economic disruption, Rabobank believes that this
will lead to another year of record prices in most markets
for most proteins around the world,” the report states.
“The big picture is that global meat and poultry production
is in the midst of a multiyear process of adjusting
to higher and more volatile feed costs.
that long-term prices for key protein-production inputs
such as corn and soybeans will gravitate towards the
incremental cost of production. Despite a large rebound
in crop production from the Black Sea region in 2011,
there is still no margin for error for global crop supplies,
due primarily to poor yields in the U.S.”
Overall, Rabobank is predicting a drop of 5 percent
for beef, chicken and hogs combined by the last quarter
of 2012. Beef, however, will take the biggest hit, dropping
an estimated 7 percent by the last quarter, the report
part by horrible drought conditions, cattle producers
were placing animals into feedlots at a much higher
clip this summer, up 22 percent in July.
clearly indicates that U.S. beef supplies will be plentiful
when these placements come to market late in 2011 and
into 2012, the liquidation of breeding stock at this
level will have a long-term impact, and, we believe,
cause a potentially dramatic decline in beef production
by mid-2012,” the report explained.
matters is the continuing slide of beef consumption
in the United States. While emerging countries continue
to be prime buyers of U.S. protein products, American
consumers are eating less beef. For next year, consumption
of beef in the U.S. is estimated at about 80 pounds
per person. Ten years ago, U.S. consumers ate about
97 pounds of beef per person, per year.
Chicken production, meanwhile, is expected to be down
slightly in part because of low prices for breast meat
as well as leg quarters. Poultry producers have been
struggling, mainly because of feed costs, but a drop
in production should help.
some cutbacks in bird production, we believe profits
will remain under pressure into early 2012 as bird weights
(up an average 3-4 pounds per bird) have provided a
significant offset,” according to the report. “We believe
that the industry can return to profitability some time
analyst Shawn Hackett, author of the Hackett Commodity
Report based in Florida, said recently one solid year
of grain production will help everyone down the line.
A good growing year should help to replenish U.S. stocks
and drive prices down, possibly creating a “corn glut”
that should help livestock farmers. “Chicken producers
are collapsing right now, and dairy farmers are having
difficulty. When feed prices get this high, it starts
to hurt,” Hackett said.