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Global demand critical as production projected to increase
An ag economist says strong global demand will be critical to the profitability picture for US beef, pork, and poultry producers in the coming months. In their latest supply and demand report, the USDA raised its production estimates for beef, pork, and poultry for 2020.
University of Missouri ag economist Scott Brown says that creates even more price volatility for those industries. “Here’s a situation where expected production is growing from many folks, that’s a negative, a domestic economy that’s maybe struggling a little more – that’s a negative,” he says. “You’ve got to have something on the other hand. So the economist in me has some higher exports as a reason to be optimistic.”
He tells Brownfield there is a lot of downside risk potential for producers later in the year as some of the animals that were held back because of processing slowdowns start to come to market. “We probably have some fairly large meat supplies coming to market and an unknown domestic economy that worries me about that downside risk,” he says.
The USDA raised beef production for 2020 by nearly a billion pounds from the previous month.
