Farms.com Home   News

Rabobank Reports On Increased U.S. Protein Consumption

Their report delves into the implications of this record U.S. protein expansion.
Not only was last year noteworthy for the near 5% increase in per capita consumption, but also due to the fact that the growth was achieved without the help of beef, consumption of which was flat. Rabobank expects U.S. protein production growth of 2.5% per annum through 2018, down from 3% in 2015, with beef being the largest contributor relative to pork and poultry.

Trade appears to have stabilized in 2016 so far and they don’t foresee international markets absorbing all of this production growth, thus requiring further increases in domestic consumption. This will continue the upward trajectory of U.S. protein consumption toward the all-time peak of the mid-2000s, which will ask a lot of U.S. consumers and will come at the cost of lower prices. By the end of this expansion cycle in late 2018, Rabobank expects a more challenging profit environment across the U.S. meat industry, providing strategic opportunities for those producers with the capital and foresight to take advantage of them.

With U.S. protein production growth looking to continue at a pretty substantial rate of 2.5% over the next few years, protein exports face numerous challenges and will struggle to keep up with this growth, suggesting an increase in domestic protein availability. The global meat trade is getting increasingly competitive, with exchange rate volatility being a key factor in determining market advantages.

As a result of the strengthening U.S. dollar, American consumers will have to absorb, or rather consume, much of the future supply growth. After having increased consumption by 5% in 2015, there is a clear question regarding how much more appetite for animal protein consumption exists domestically. Rabobank isn’t ready to start calling for margins to turn negative this year or possibly even in 2017, but they expect the profit environment by the end of 2018 to look very different than it does today.

Source: Meatbusiness


Trending Video

Locks, Boats & Visiting Sheep Farmers!

Video: Locks, Boats & Visiting Sheep Farmers!

In today’s episode of our sheep farming vlog at Ewetopia Farms, we blend farm life with a bit of local sightseeing as we welcome fellow sheep farmers visiting from Alberta! After completing the morning chores, we take a scenic trip to Washburn Locks on the historic Rideau Canal—just minutes from our farm. With perfect timing, we watch several pleasure boats and even the Kawartha Voyageur cruise ship navigate the locks, a rare treat for visitors and locals alike.