When meat consumption is falling, it is almost sure to be a period of deteriorating economic conditions. On the other hand, rising meat consumption is generally a sign of an improving real economy. In contrast to the official end of the economic recession in the U.S. economy in 2009, the meat recession ended in 2012. During the meat recession, U.S. per capita red meat and poultry consumption dropped nearly 20 pounds or 10 percent. It was the biggest such recession since the 1930s.
With a slowdown imminent in the rate of increase in animal protein in China, the rate at which imports of soybeans grows is also about to slow down. Instead of growing at 5 million metric tons per year, it can be expected that the rate of increase will be falling. Over the next several years a much lower average growth of perhaps 2 or 3 million metric tons can be expected.
The future of the world chicken industry depends a lot on the taste for chicken in China. Currently chicken is not the most popular protein in China, nor is it second or even third. Chicken meat is a distant fourth after pork, farmed fish and table eggs. If the Chinese develop a taste for eating slightly more chicken, the country would become the largest producer of chicken meat.
A significant change in the relationship between growth in the developed and developing world is taking place. Growth in the developing world is slowing while the developed world accelerates. As a result, the difference between the two is narrowing.
Chicken meat consumption is often looked at through the lens of the richest part of the world, but that part of the world does not include the majority of the income group that will be buying much more chicken in the next few decades.
Corn reached a high point of $8.44 per bushel in August of 2012, and hindsight now suggests that a bear market began at that moment. Since vicious bear markets often follow on the heels of vigorous bull markets, the poultry industry can hope or at least dream about $5 or less corn this fall. Is this dream realistic?