China has rebuilt its pig herds faster than expected, boosting demand and prices for soybeans and corn used for animal feed. With herds growing rapidly, the world’s largest consumer may soon need to import less meat.
This double dynamics – increased feed costs and the likelihood of smaller meat consignments to China in 2021 – threatens to reduce livestock and poultry farmers’ incomes in the US, Brazil and elsewhere, as well as the profits of companies that process livestock into meat. What’s worse is that farmers are hit hard just when they are trying to emerge from a coronavirus pandemic that has increased costs and reduced livestock prices domestically.W. Sawyer predicts that American beef, pork and chicken producers in 2021 will experience 12 percent higher feed costs than this year.Meanwhile, worries about declining meat exports to China in the coming months have already begun to materialize in prices in the U.S., where demand in restaurants and establishments such as schools is still declining due to the pandemic.
Pan Chenjun, a senior livestock analyst at Rabobank, estimated last week that pork imports in China could fall 30 percent next year.In Brazil, the world’s largest exporter of chicken, feed costs have received an additional boost: the devaluation of the local currency. Weaker reals have made exports more attractive, with soybean stocks reaching their lowest level since 1999.
The drought is also destroying summer corn crops in the southern part of the country, a poultry and pork production center. According to Ricardo Santino, head of the ABPA group of meat exporters, this combination has raised the prices of Brazilian meat to a new level.
https://m.delfi.lt/verslas/bloomberg/article.php?id=86014607
