One upside from the many trade war tensions? Consumers in the U.S. are eating more U.S. beef and pork at lower prices.
Expansion by U.S. cattle and hog producers for the past year was on track to put a large amount of meat on the market. When China and Mexico issued tariffs against U.S. red meat exports, many feared a pileup of meat supplies would drive down prices. But even through the trade headwinds, domestic demand has kept pace.
Where it has hurt, however, is in the chicken aisle. Reuters reports chicken producers would generally lose money or break even in the fourth quarter of 2018.
Tyson reported last week that quarterly sales missed Wall Street estimates, sending shares lower, even as the company posted a profit. Operating income from chicken fell nearly 34% from a year earlier, while beef operating income was up about 14%.
The pain for chicken producers and the increased appetite for pork are ripple effects of Trump's trade disputes, which have also reduced shipments of U.S. soybeans and sorghum to China.
The shift is hurting chicken producers, such as Tyson Foods Inc., and Sanderson Farms Inc., said Bill Roenigk, an agricultural economist and consultant for the National Chicken Council trade group, in this Reuters article. He said the chicken sector would generally lose money or break even in the fourth quarter of 2018.
"With all that pork on the market," Roenigk said, "it has spilled over to affecting consumers' demand for chicken."
USDA projects per capita chicken consumption will rise only about 1.2% next year, compared to gains of 4.3% for pork and 2.6% for beef.
A look back at September Export Numbers
U.S. Meat Export Federation tracks monthly export data from USDA. September data, released at the beginning of November, shows the impact the tariffs had on foreign meat sales.
September pork export volume was down 2% from a year ago to 179,423 mt, while export value fell 7% to $470.2 million. Pork muscle cut exports improved over last September’s volume, but were offset by sharply lower shipments of pork variety meat.
With China and Mexico markets putting pressure, U.S. pork found successes in divesting into new, smaller markets, such as South Korea and South America—including Colombia, Peru and Chile.
Beef had less of battle. U.S. beef exports remained very strong in September, with an increase of 6% over a year ago. Taiwan, Mexico, China/Hong Kong, Philippines and Vietnam, all posted year over year increases.