Source: Lisa M. Keefe, MEATINGPLACE, 10/27/17

 Export sales for beef, chicken and pork are expected to rise in 2018, compared with 2017, despite the uncertainty surrounding the renegotiation of the North American Free Trade Agreement (NAFTA) and the future of other trade pacts, according to Brett Stuart, founding partner of Global AgriTrends in Denver.

Stuart discussed the state of the global protein market in a conference call hosted by Stephens Inc. analyst Farha Aslam, she said in a note to investors summarizing the conversation.

“In 2018, US protein exports will be critical to pricing given production of beef, pork and poultry are expected to increase. Trump's nationalistic focus and the administration's efforts to renegotiate existing trade deals have added a degree of uncertainty in the outlook for US protein exports,” Aslam wrote.

Stuart projected that beef exports will be up 6 percent next calendar year, chicken up 2 percent, and pork up 4 percent, large because of increased domestic production.

The international beef market is likely to be friendly toward greater U.S. beef supply as prices have dropped and the Australian cattle herd is still constrained by drought.

Chicken exports, meanwhile, are seeing solid demand from smaller markets such as Angola and Kazakhstan, helping to support prices. As well, capacity has put a ceiling on near-term supply growth.

The ramping up of U.S. production of pork will help that protein be attractively priced in the international market, but likely at lower prices.

Trade deals
The NAFTA renegotiations concluded a fourth round last week with a fifth round scheduled for Mexico City in November. Media reports indicate little progress so far.

In addition, the Korean-U.S. bilateral pact is under scrutiny; as that agreement provides U.S. beef and pork duty-free access to South Korea, meat processors would prefer that nothing in this deal be changed.

And, the United States has been slow to develop bilateral relationships to replace the Trans-Pacific Partnership that President Trump pulled out of earlier this year. At the same time, though, other countries have continued to solidify their business exchanges through the TPP, and the European Union has signed a bilateral free trade agreement with Japan.

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