During the Central American Poultry Congress last week in Antigua, Guatemala, I came across an unexpected comment: "With Trump, chicken prices will be stabilized and improved." What is this based on?
It is expected that global trade will be affected by the U.S. imposing a 35 percent tariff on imports. Latin America is likely to reciprocate and tariffs will also be applied to U.S. exports. Thus, the U.S. chicken will be out of the market and this will boost domestic poultry production. It is uncertain what the U.S. would do with all those leg quarters, and what would happen to the global market, if it still exists.
Impact on grain trade
The problem I see here is with grain imports. Will countries also apply import tariffs on corn, sorghum and soybeans from the U.S.? Remeber, though, that these raw materials will always be available from Brazil and Argentina, although those sources are a bit far for northern Latin America.
Take into account that, as the U.S. Grains Council (USGC) Market Perspectives report this past week says, "While an army of analysts will continue to figure out what a Trump presidency means for agriculture at large ... initial reactions are positive for the industry."
Time will tell.
However, keep in mind that, on this side of the "wall," it is also a jungle. Large poultry tigers, like Brazil, are on the prowl in the markets. Meanwhile, they observe. What do you think?