Source:  Tom Johnston, MEATINGPLACE, 10/28/16

All roads lead to China. By that, Will Sawyer, poultry analyst for Rabobank International, means to emphasize how important the Chinese market could be to the success of the U.S. poultry market in 2017. 

When asked to sum up his presentation on chicken here at the National Chicken Council annual meeting in one takeaway, his response was: “China, China, China.”

The response to the same question from Kevin Good, senior analyst at CattleFax, with regard to the U.S. beef market, was: “Trade, trade, trade.”

Expected increases in supplies and decreased prices of chicken, beef, pork and grain had a panel of analysts thinking along the same lines. Their expectations, as long as factors such as those are on the positive side, were more or less in line with USDA forecasts for 2017 compared with 2016:

Meat Production (%) Exports (%) Prices (%) Consumption (lbs.)
Chicken 2.2, 5.0, -2.7, 0.4
Beef 3.6, 6.5, -4.5, 1.5
Pork 3.8, 4.0, -11.2, 1.0
Total 3.0, 5.1, — ,3.0

Sawyer’s enthusiasm for the Chinese market for U.S. chicken is that China’s poultry production is expected to decrease by 10 to 15 percent in 2017 from 2016, and, he said, “makes this forecast for 2017 look as rosy as it could. Otherwise, it will be a tougher 2017 without it.”

The panel, which also included a pork presentation by Steve Meyer of Express Markets and a feedstuffs talk by Bill Lapp of Advanced Economic Solutions, nonetheless expressed caution about the challenge of the continuing strength of the U.S. dollar and the tempering effect it could have on exports.

Meyer was lower key about export prospects for pork, for example, where growth has been flat. Along with the strong dollar and political disputes in foreign markets, he noted that China is importing more pork from the European Union since Russia banned EU pork two years ago. He also noted that Mexico, the top export market for U.S. pork, is in the process of upping its own pig production.

Lapp encouraged companies to take care of today's relatively cheap grain prices to keep costs down in, as Meyer noted, what will be an increasingly competitive global market.

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