As the economy bounces back from its slump during the earlier months of the COVID-19 pandemic, Poultry Perspective economist Paul Aho says you can expect meat prices to rise.
Aho shared his insights on the current state of the meat and poultry industries during the March 22 session “Market Outlook for Meat & Poultry,” held during the 2021 Annual Meat Conference, held virtually.
Aho noted that the United States is experiencing explosive economic growth, and “possibly an overheating economy.”
During times when the economy is good, consumers tend to spend more on meat. But there is a challenge to meeting that anticipated growing demand. The supplies of meat and poultry may not be growing at the same pace.
From 2018 to 2020, Aho said, there were 3.2 billion additional pounds of red meat and poultry produced. However, from 2020 to 2022, there may only be 1 billion additional pounds.
“So this relatively small increase in meat is coming along just as the economy starts revving up,” said Aho.
“So we’ve got a hot economy, not very much more meat coming on this year, so it’s extremely likely that meat prices are going to rise and be high this year.”
Impact of grain prices
Aho also discussed how feed prices could impact the price of animal proteins for the remainder of the year. The damages from the derecho storm of 2020, combined with increased exports of U.S. corn, have led to a diminished supply of corn and subsequent rise in prices.
Because of rising grain costs, Aho expects in the short-term that consumption of beef and pork will see a slower growth, and faster growth of consumption of poultry, farmed fish and other sources of protein.
Also speaking during the session were Randy Blach of CattleFax Inc. and Steve Meyer of Partners for Production Agriculture.
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