Source: Sierra Dawn McClain, Capital Press, 22 March 2021, photo credit: Christopher Testani/CookingLight
Economists and protein experts at the USA 2021 Annual Meat Conference Monday predicted mostly positive developments for the meat industry this year.
Experts predict strong consumer demand and expanded trade opportunities, contrasted with shrinking production — “a recipe for higher meat prices.”
Retail demand is expected to soften as restaurants reopen, but economists say the hot economy for proteins is likely to remain healthy.
Paul Aho, economist and consultant at Poultry Perspective, said that because of high grain prices, he predicts more growth in poultry demand compared to pork and beef this year.
Aho said 2021 “started off with a bang” with strong demand for deboned chicken breasts.
Wing prices are also high, a trend Aho predicts will continue through 2021.
“Americans love their wings,” he said.
As demand increases, production growth is slowing. The U.S. is expected to produce only 1 billion additional pounds of red meat and poultry 2020 to 2022, compared to 3.2 billion additional pounds 2018 to 2020.
Less meat coupled with strong demand, Aho said, should mean higher prices for producers.
On international trade, Aho said China is purchasing record volumes of chicken right now in the wake of African swine fever. Although Chinese consumers prefer pork, many are turning to chicken during the protein shortage.
“But this is all dependent on if the relationship remains cordial with China,” said Aho.
There’s also growing chicken demand in the Middle East, Aho said.
Although pork producers faced a tough 2020, Steve Meyer, economist at Partners for Production Agriculture, said by the end of the year, pork demand was strong.
Sow prices are near record high this month, he said, “a sign of great demand for sausage and processed meats.”
As restaurants reopen, Meyer predicts shoppers will gradually buy smaller pork volumes. For example, a consumer might buy a burger at a restaurant with just a few slices of bacon on it compared to a whole pound of bacon in a grocery store.
Even so, Myer expects many people who picked up cooking during COVID-19 will continue.
On the international market, Meyer said pork exports are at a record high. The U.S. exported 15.2% more pork in 2020 than in 2019, and demand continues to grow.
Despite restaurant closures, Randy Blach, CEO of CattleFax, said the beef industry during 2020 saw its highest demand in 30 years.
As the world pulls out of the pandemic, Blach predicts 2021 will be the second-highest year on record for beef demand.
Domestic per capita meat consumption is then expected to decline 4% to 5% over the next few years, but Blach predicts exports will pick up significantly.
The supply-and-demand balance, Blach said, should work in producers’ favor because beef production is expected to plateau.
“Beef production the next few years is going to contract, to decline,” he said.
With increasing global demand and shrinking supply, Blach said producers will likely see “strong” wholesale meat prices.
Another plus for beef producers, Blach said, is that additional packaging capacity is on its way under the new administration.