Source: Chris Scott, MEATINGPLACE, 10/7/14

Anticipated strength in protein margins for 2015 – with beef being the exception –generated a general sense of optimism at the EMI Fall Protein Outlook Conference, according to BMO Capital Markets analyst Kenneth Zaslow.

Attendees in Grapevine, Texas, heard predictions of chicken production rising by a modest 1 percent in 2015 while chicken margins are likely to remain well above historical highs, Zaslow reported. The record corn and soybean harvests have lowered costs for chickens even as prices remain high, he added.

Hog supplies also are expected to increase by as much as 4 percent despite concerns about PEDV. One speaker estimated that the recent PEDV outbreak has killed at least 8 million pigs since 2013 and infected 60 percent of sow herds.

EMI also expects turkey margins to remain strong throughout 2015 in spite of a drop from a record high and production growth in 2014, said Zaslow.

The prospects for beef were not as positive, Zaslow reported. Current pasture conditions and cheaper corn will finally allow the industry to rebuild the cattle herd. One economist, however, predicted that at least one beef packer that he did not identify is expected to close before April, even as the cattle feedlot industry continues to consolidate.

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