OSU's Derrell Peel Talks About the Issues Facing the Food and Agricultural MarketsMon, 14 Oct 2019 17:44:32 CDT
Mondays, Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry. This analysis is a part of the weekly series known as the "Cow Calf Corner" published electronically by Dr. Peel and Dr. Glenn Selk. Today, Dr. Peel talks about the issues in the food and agricultural markets.
"As important as population growth, perhaps more so for meat industries, is economic growth and the growing middle class. Globally, the middle class is projected to expand from two billion to 4.9 billion people by 2030. China alone is projected to add 850 million new middle class consumers by 2030. It is well documented that meat consumption increases as growing incomes support better quality diets and increased protein consumption.
"Two different presentations by speakers from the Federal Reserve noted that the U.S. is currently experiencing a very long period of relatively weak economic growth. These and other presentations noted that the shrinking U.S. labor force is contributing to the slow pace of economic growth. As the U.S. population ages, fewer new labor force entrants are available to replace those leaving the work force. It was also noted that productivity growth will not likely be sufficient to offset the declining labor force.
"Other labor presentations noted the important role of immigrants historically in food and agricultural industries and the growing need for low to medium skilled workers to support all aspects of agricultural and food production, including vegetable and fruit harvest; dairy, ranch and feedlot workers; labor for food processing and manufacturing; and restaurant servers and chefs. Recent research conducted by Oklahoma State University confirmed the pervasive labor issues and challenges in all sectors of the beef industry from packers to further processing and food distribution to retail and food service*.
"The growing reality of the massive impact of African Swine Fever (ASF) was another common topic in these conferences. The rapidly changing dynamics of this disease suggest that the impacts are global in nature and not only for the coming weeks and months but likely will fundamentally impact global protein markets for years or decades. It appears at this time, that swine and pork losses in China, Vietnam, North and South Korea, and the Philippines along with other outbreaks of ASF in Europe and Africa is creating a protein deficit that cannot be currently filled by all proteins in the world.
"Finally, the conferences included discussions about alternative proteins, particularly plant-based proteins. Various perspectives noted that some in both the meat and plant-based protein markets view each other as competitors battling to replace the other. There was also recognition that the markets may be complementary, not only for retail and food service businesses to offer a more comprehensive set of protein product choices to consumers; but also the reality that it will likely take both meat and plant-based protein to feed the world through the remainder of the century."
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