Economic issues facing the global meat industry

Consumer shifts towards low-price beef for home-eating, and a remarkable price-oriented competition with pork and poultry. Beef processors report difficulty to achieve carcass market price balance, evidencing the sensitiveness of beef to negative economic periods.

The peak commodity prices during 2007-2008 period inflated feed input costs and knocked operational margins of grain-fed livestock. Recent agricultural price adjustments benefited producer margins, to the extent that input costs decreased faster than livestock values. Unattractive margins remain for US grain-fed cattle producers and processors, being mostly domestic market oriented and unable to benefit from currency fluctuation. In EU, positive farm level margins are due lower feed costs and limited competition from low-price imported Brazilian beef. Pork and poultry producers overcame the critical periods of high feed inputs and enjoy gradual higher margins.

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