Rabobank Predicts 5% Decline in US Meat and Poultry Production

Barring major economic disruption, Rabobank believes that this will lead to another year of record prices in most markets for most proteins around the world.

Sep 30 2011 --- US meat and poultry production could decline by nearly 5 percent year-on-year by mid-2012, according to a new report from Rabobank Food and Agribusiness Research analysts. Overall Rabobank expects global protein supplies to tighten further in 2012 as production lags behind GDP growth. Barring major economic disruption, Rabobank believes that this will lead to another year of record prices in most markets for most proteins around the world.

Key points
•     Meat and poultry production in the United States (US) is headed for a precipitous fall in 2012. 
•     Extreme drought in the South and Southwest US is exacerbating the long-term structural downtrend in the cattle herd
•    The chicken industry is suffering probably its worst-ever downturn in profitability, which is causing production cutbacks.
•     Profitability in the pork industry has so far been holding steady, but there are some early signs of increased sow slaughter as the industry comes to grips with some of the tightest corn supplies in history.
 
Source: Rabobank Group