DENVER, CO – Prices paid by consumers for a protein hit an all-time high in October and the trend is expected to continue into 2022 according to a new report from CoBank.
The Consumer Price Index for all meats, poultry, fish, and eggs increased 12 percent over 2020, and CoBank suggests that the higher prices could limit consumption growth, tighter cattle supplies, ongoing broiler breeder issues, and sow herd reductions should support favorable processor margins through at least the first half of next year.
Export demand by China has been record-breaking in 2021 as well, but analysts believe the “collective U.S. protein opportunity to China may have already peaked.”
On the dairy front, CoBank says global milk supplies will tighten in 2022 as dairy farmers reduce herd sizes in response to cost inflation pressures, which will lift milk prices allowing producer margins to finally improve. The squeeze will then move from producers to processors as tighter availability of milk may lead to negative returns for that sector of the industry.
(SOURCE: All Ag News)
