Oklahoma Farm Report masthead graphic with wheat on the left and cattle on the right.
Howdy Neighbors!
Ron Hays, Director of Farm and Ranch Programming, Radio Oklahoma Ag Network  |  2401 Exchange Ave, Suite F, Oklahoma City, Ok 73108  |  (405) 601-9211

advertisements
   
    
   
   
   
   
   
   
   
   

Agricultural News


CoBank Report Predicts Easing of U.S. Protein Glut in 2016, Better Year for Beef, Pork and Poultry

Thu, 21 Jan 2016 11:52:08 CST

CoBank Report Predicts Easing of U.S. Protein Glut in 2016, Better Year for Beef, Pork and Poultry The supply glut that plagued U.S. beef, pork and poultry markets last year and ratcheted down margins is expected to ease in 2016, according to a new research report from CoBank. The bank, a major agribusiness lender, says leading indicators point to animal protein supplies moving toward a state of equilibrium, with protein stocks more in line with overall levels of demand.


“It’s clear that in the coming year, the headwinds and adverse conditions created by excessive protein stocks are clearing,” said Trevor Amen, animal protein economist with CoBank. “Surprisingly strong U.S. consumer demand helped lay the groundwork for improving market conditions in the coming year, meaning the net trade balance is expected to shift toward growing exports and fewer imports. This is welcome news for U.S. beef, pork and poultry producers.”


On the Horizon


In the first half of 2016 protein exports are expected to remain somewhat of a challenge. “But conditions are predicted to improve over depressed 2015 levels due to a variety of economic factors,” added Amen.


Meanwhile, imports of lean beef should slow significantly and domestic consumer demand for beef, pork and poultry is anticipated to remain strong and supportive of prices. Supply imbalances have already begun the correction phase, with supply and demand expected to achieve equilibrium by about mid-year. The strength of consumer demand going forward will impact how much and how soon U.S. meat prices change.


For instance, meat demand in the restaurant sector continues to grow. The Restaurant Performance Index and the Expectation Index each indicate positive restaurant business conditions. Combined with lower gas prices, current consumer attitudes indicate a willingness to spend more at restaurants versus in-home meals during 2016.


Price outlooks are mixed:


• Pork and chicken prices have an upside potential compared to last year’s low levels, based on adjustments made for future production.


• Beef prices will likely remain under pressure for the next two years, however, as the industry is coming off cyclical highs of 2014.


Of course, optimism for 2016 should be tempered by the oversupply lessons of 2015.


“Total red meat and poultry production set an all-time high in 2015,” said Amen. “Combined with fewer exports and more imports, total domestic meat supplies surged by 4.4 percent, the highest year-over-year increase in 40 years.” That increase in supply translated to an additional 9 pounds of protein per person—historically, protein supplies rose an average of 0.8 pounds per person per year from 1960 to 2015.


As the market works through the recent protein oversupply hangover, the long-term outlook remains positive, especially with continued global middle class growth. “The increasing demand for a higher-quality diet likely provides domestic protein producers with significant opportunities in the next decade,” concludes Amen.


A synopsis of the 2016 Protein Demand Outlook Report is available at www.cobank.com.


   



 

WebReadyTM Powered by WireReady® NSI

 


Top Agricultural News

  • Corn Harvest Reaches 92%, Cotton Harvest Reasches 89% Nationally and Most Wheat Planted  Mon, 09 Dec 2019 20:41:18 CST
  • OSU's Derrel Peel Talks How Beef Exports are Struggling and Imports are Steady so far for 2019  Mon, 09 Dec 2019 20:24:24 CST
  • 75th Annual AFR/OFU State Speech Contest Challenges Oklahoma Youth  Mon, 09 Dec 2019 20:19:46 CST
  • Media Advisory: NCGA Leaders to Call on Washington to Finish the Job on Trade and Ethanol  Mon, 09 Dec 2019 20:14:59 CST
  • Media Advisory: NCGA Leaders to Call on Washington to Finish the Job on Trade and Ethanol  Mon, 09 Dec 2019 20:14:34 CST
  • Conaway Leads 159 Republicans Urging Pelosi to Hold Vote on USMCA  Mon, 09 Dec 2019 20:09:30 CST
  • Slaughter Cows Sold 4.00-700 Lower, Slaughter Bulls Mostly 3.00-8.00 Lower Monday at OKC West  Mon, 09 Dec 2019 20:04:16 CST
  • Oklahoma Grain Elevator Cash Bids as of 2:00 p.m. Monday, December 9, 2019  Mon, 09 Dec 2019 19:34:37 CST

  • More Headlines...

       

    Ron salutes our daily email sponsors!

    Oklahoma Ag Credit Oklahoma Farm Bureau National Livestock Credit P&K Equipment Tulsa Farm Show AFR Insurance Stillwater Milling KIS FUTURES, INC. Oklahoma Cattlemen's Association

    Our Road to Rural Prosperity sponsors!

    Banc First OPSRC ORWA TPAOO TPAOO

    Search OklahomaFarmReport.com


       
       
    © 2008-2019 Oklahoma Farm Report
    Email Ron   |   Newsletter Signup   |    Current Spots   |    Program Links

    WebReady powered by WireReady® Inc.