US red meat exports ‘remarkably resilient’
27/05/2022
Dan Halstrom is optimistic that exports will post a strong performance in 2022, but cautioned that across the globe, inflation is pressuring consumer spending power.
He said: "To date, demand for US red meat has been as strong as I've ever seen in all my years in the meat business, and remarkably resilient.
"But the question is, at what point do these inflationary pressures start to constrict disposable income for the global consumer? At what point will we see a crack in demand?"
Mr Halstrom also highlighted foodservice and retail trends during the pandemic and are here to stay, such as takeout ordering and grocery sales through e-commerce platforms.
He noted that last year total US red meat exports soared to a record $18.7 billion. While more moderate growth is projected this year, he said exports could approach the $20 billion milestone.
However, consultant Peter Zeihan sees the relatively stable period of economic growth driven by globalised trade coming to an end, replaced by a new era characterised by labour and supply shortages, an environment of constrained capital and rising inflation.
On the agricultural side, these trends are exacerbated by the war in Ukraine as sharply reduced production of wheat and the cost and availability of fertilizer, nitrogen, potash and other inputs will limit global food production for an extended period.
He projects that food insecurity will rise around the globe and says conditions are ripe for regional famines.
Mr Zeihan noted, however, that while American farmers and ranchers face sharply higher input costs, their production and supply chain challenges are not as drastic as in many other regions. So, despite significant obstacles, he emphasized that US agriculture is well-positioned for robust growth over the next 10-12 years.
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