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Market Outlook for
Meat and PoultryPaul Aho, PhD – Economist and Consultant,
Poultry Perspective
Randy Blach – CEO, CattleFax
Steve R. Meyer, PhD – Economist, Kerns & Associates
Tuesday, March 3, 2020 8:00 AM – 9:45 AM
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Poultry / Grain Outlook
Dr. Paul Aho - Poultry Perspective
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Coronavirus
• Impacting Trade of all kinds
• Internal Chinese Supply Chain
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China Per Capita Consumption in Pounds 2018 – Chicken is White
Feathered
0
20
40
60
80
100
Meat 90 77 15 15
Pork Fish Beef Chicken
-
China –Chicken Imports % of Total World Trade
0
2
4
6
8
10
2018 2019 2020
-
White Feathered Chicken Production in China - Ready-to-Cook -
Millions of Metric Tons
4
5
6
7
8
9
10
MMT 8.2 8.6 9.9 8.8 8.1 7.6 7.4 8.4 8.5
2012 2013 2014 2015 2016 2017 2018 2019 2020
-
Mexico and Cuba Biggest US Export Markets 2019
•Mexico is the #1 Buyer 1,500,000,000 Pounds / year
•21% of all exports•Next largest buyer – Cuba-
500,000,000 lbs.
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Potential Increased Bottom Line Income from Sales to China –
Without
Current Extra Duty of 30%
•$600 Million paws•$400 Million CLQ/drums/wing tips•Opportunity
for Turkey and Turkey products•$1 Billion per year
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Recent Trade Deals – Effect on US Poultry Exports
• China Market opened for chicken - extra duty affects CLQ,
drums and wing tips
• US genetics still banned in China• Mexico deal continues good
status quo• Don’t forget Japan, market now open with
low tariffs
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10
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Thigh Price 2018 -2019 Cents per Pound – USDA Northeast
Price
25
35
45
55
65
75
85
95
Jan
Feb
Mar
Apr
il
May Ju
nJu
lAug
Sept O
ctNov D
ec
2019
2018
-
Leg Quarter Price – 2019-2020Cents per Pound – USDA Northeast
Price
20
24
28
32
36
40
44
48
52
Jan
Feb
Mar
Apr
il
May Ju
nJu
lAug
Sept O
ctNov D
ec
2020
2019
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Current Situation in the US
• Economic Growth, will it continue?
• Rise in Total Meat Availability
• Recently a lot more chicken
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US Quarterly Broiler Production –Million Pounds – USDA
10250
10500
10750
11000
11250
11500
11750
12000
1st Q 2nd Q 3rd Q 4th Q
2020
2019
2018
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Weekly Chick Placement - Millions 7 Weeks Forward – 2020 versus
2019
174
176
178
180
182
184
186
188
190
192
194
15-Feb 22-Feb 29-Feb 7-Mar 14-Mar 21-Mar
2020
2019
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Large Increase in Meat Total Use 2018- 2020 - USDA
• Pork and Beef - 1.2 Billion pounds
• Poultry - 2.8 billion pounds
4 Billion pounds, Red Meat and Poultry
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Smaller Increase in Meat Total Use 2020- 2022
• Beef and Pork 0.6 billion lbs.
• Poultry 1.4 billion lbs.
2 Billion pounds, Red Meat and Poultry
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US Per Capita Consumption of Red Meat and Poultry lbs.
92
96
100
104
108
112
116
120
2007 2009 2011 2013 2015 2017 2019
Red Meat
Poultry
USDA to 2020
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US Per Capita Meat Use in Pounds & Household Median
Income
200
205
210
215
220
225
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2019
50000
52000
54000
56000
58000
60000
62000
64000
Total Meat Use
Median Income
Median income US Census to 2017 -Meat Use WASDE to 2018
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Deboned Breast Price
• Long term decline due to increased efficiency of
production
• 80% drop in price since 1986
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Deboned Breast - Cents/lb2020 Dollars – USDA Northeast
0
100
200
300
400
500
1986 1990 1994 1998 2002 2006 2010 2014 2018
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Deboned Breast – 2019-2020USDA – Northeast Price – Cents/lb
70
80
90
100
110
120
130
140
Jan Mar May Jul Sept Nov
2019
2020
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Wing Price
• Robust Demand
• Low unemployment higher wages
• Prices similar to 2019
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Whole Wing Prices – 2019-2020USDA-Northeast Price- Cents/lb
150
160
170
180
190
200
210
220
Jan Mar May Jul Sept Nov
2020
2019
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Wholesale Price in Cents/lb
2010 2020 2030
Leg
Quarters
0.40 0.42 0.57
Deboned
Breast
1.55 1.00 1.00
Wings 1.23 1.90 1.75
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Poultry Price Conclusion
• Deboned Breast lower than last year
• Wings High and Stable
• Leg Quarters rising
• Paws much more valuable this year
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What would be the Catalyst for Higher Grain Prices?
•Significantly higher sales to China •Supply hiccup -
drought
-
28
-
29
Chance of a Drought is 17% for any Given Year
The Same as Getting a “7” with dice
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Corn Yield 1970-2019Bushels Per Acre – US – Drought Years in
Red
50
75
100
125
150
175
200
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
2010
2014
2018
-
US Ending Stock of Corn Millions of Bushels
0
500
1000
1500
2000
2500
Bushels 821 1232 1731 1737 2293 2140 2114 1892 2300
2013 2014 2015 2016 2017 2018 2019 2020 2021
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World Ending Stock of Corn MMT – USDA to 2020
200
225
250
275
300
325
350
375
MMT 337 350 341 320 298 310
2016 2017 2018 2019 2020 2021
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China – Corn Imports –Millions of Metric Tons
0
2
4
6
8
10
2016-
2017
2017-
2018
2018-
2019
2019-
2020
2020-
2021
2021-
2022
-
Average US Farm Price of Corn$/Bushel USDA to 2019-2020
$2.00
$2.50
$3.00
$3.50
$4.00
2014-2015 2016-2017 2018-2019 2020-2021
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US Ending Stock of Soybeans in Millions of Bushels – USDA to
2020
0
200
400
600
800
1000
MB 141 92 191 197 302 438 913 425 525
2013 2014 2015 2016 2017 2018 2019 2020 2021
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World Ending Stock of Soybeans in Millions of Metric Tons
0
20
40
60
80
100
120
MMT 57 63 78 78 96 99 110 96 102
2013 2014 2015 2016 2017 2018 2019 2020 2021
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China – Soybean Imports –Millions of Metric Tons
0
20
40
60
80
100
2001-
2002
2004-
2005
2007-
2008
2010-
2011
2013-
2014
2016-
2017
2019-
2020
-
Average US Crop year Price of SBM USDA to 2019-2020
$200
$250
$300
$350
$400
2014-2015 2016-2017 2018-2019 2020-2021
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Grain Price Conclusion
•Corn heading lower
•Soybeans sideways
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The King of Meats?
In Millions of Metric Tons - USDA
85
90
95
100
105
110
115
2017 2018 2019 2020 2021 2022
Chicken
Pork
