Protein Consumption to Soar, Pork Prices Could Soon Increase
Grilling season is here and Memorial Day marks one of the biggest meat consumption weekends of the year. Chicken has been the champion protein in recent weeks, with restaurants driving much of the demand.
However, strength in the overall U.S. economy supports continued beef consumption. Additionally, analysts say pork prices, while low currently, could soon see sharp increases due to export demand.
“[Poultry consumption] has really picked up since the beginning of the year,” Christine McCracken, executive director, protein analyst at RaboBank AgriFinance, told U.S. Farm Report Host Tyne Morgan. “You’ve seen a big increase in future activity. “With poultry’s availability and its [low price], I think retailers and food service really see opportunities to feature chicken and turkey.”
She says poultry’s increase in demand could be shifting from beef, but Glynn Tonsor, with Kansas State University, says beef producers shouldn’t be concerned about demand.
“Where we’re sitting there’s a lot of optimism about the domestic U.S. economy, consumer incomes are up and unemployment is really low,” he said. “Historically, that’s really important for beef demand. If Mother Nature continues to allow us to get out and grill, I would remain optimistic that grilling based demand coupled with that kind of economic ability to pay will be there. So, [higher beef prices are] not a detriment.”
Pork prices are stable, but with African swine fever (ASF) plaguing Asian countries there’s opportunity for producers to see increased export demand. That demand, by the nature of the market, will likely increase domestic pork prices—but not in time for Memorial Day.
“It may not affect consumers immediately but later on in the year, maybe closer to Labor Day, we could see a lot of upside, a lot of incremental price pressure,” McCracken said. “So, while we will have more [supply] available, a big share of that could be headed out, particularly to the Asian market where we’ve seen massive losses tied to disease. I expect products to start moving out here in the very near future.”
But, what will it take to increase protein demand domestically? It’s expected U.S. citizens will consume more protein, but a few unknown factors remain.
“Per capita consumption is what we produce, plus what we import, minus what we export,” Tonsor said. “So, changes to any of those three change the volume number we're talking about. Then you get to add the demand side, what is the public able and willing to pay for it? In many ways, we're answering demand questions. But you have to be careful not just to stop with per capita availability, because that could be changed by exports and shorts on the import front or worst case [scenario], a disease event here will change our domestic production as well. All of those [factors] have to be monitored.”
