Wednesday, February 21, 2024

Outlooks for ag production, national election examined

Must read

By Barbara Olejnik

Poultry Times staff

ATLANTA — Outlooks for U.S. agricultural products and the national political scene were topics at the Poultry Market Intelligence Forum held during the 2019 International Production & Processing Expo.

Speakers included Dr. Paul Aho of Poultry Perspectives, Michael Donahue, vice president of Agri Stats Inc., and Christian Richter of The Policy Group.

Aho said basic assumptions for the years from 2020 to 2030 will be:

  • World growth at about 3.5 percent,
  • More in developing countries,
  • Greater consumption of meat,
  •  At least one global economic recession, and
  • Commodity prices on the rise.

He also doubted there would be a drought, but added that there is a 17 percent chance of one in any given year.

Specific agricultural issues forecasted included:

Grains: Corn prices are projected to go from just above $3.50/bushel in 2018-19 to $4/bushel in 2020-21. Soybean exports are starting to come back with China again buying some U.S. products. Corn and soybeans are both at the bottom of a cycle, Aho noted.

Chicken leg quarters: 33 percent of chicken leg quarters are consumed in the U.S. Consumption of the rest of the product depends on the export market. In 2019 the dollar rose against the Mexican peso and many other currencies making leg quarters less competitive.

Deboned breast price: Peak price will be lower than last year — a barely profitable year at best.

Wings: Robust demand with prices higher than 2018. Worth more than breast meat.

Paws: Worth hundreds of millions of dollars if China market opens.

Eggs: Per capita consumption going up. Industry profits higher.

Turkey: Same production as last year. Profitability improving.

Donahue said the conversion to cage-free production for layer hens has been a major trend in the egg industry. California’s 2008 Proposition 2 started the move when voters approved the measure to require specific space for layer hens.

Donahue also pointed out that:

California’s recent Prop 12 clarified the previous proposition as cage-free and will also require eggs and egg products to be cage-free.

Many food, restaurant and grocery companies, Donahue noted, have stated plans to buy only eggs from cage-free production, generally by 2025 — subject, in may grocers’ statements, to “availability, affordability and consumer demand.” However, 76 percent of pledges are from grocers where consumer demand is important.

To date, Donahue said, producers have converted in order to meet current customer demand and to gain cage-free production experience. However, while conversion continues on a limited scale, two of the largest producers have announced plans to curtail the conversion until there is more marketplace demand. To convert to the stated 225 million birds is still an additional $6.7 billion capital expenditure, Donahue noted.

Richter pointed out that the “landscape has changed” with the 2018 Congressional election that saw Democrats win a majority of House seats while the Republicans maintained the Senate. He noted that House Speaker Nancy Pelosi (D-Calif.) is under-rated by many — “she’s the adult in the room in the Democratic caucus.”

The two parties have different legislative agendas, Richter said,

House Democrats will seek to (1) Reform campaign ethics and voting rights, (2) Cut drug prices and fortify Obamacare, (3) Roll back GOP tax reforms, (4) Address climate change, (5) Revamp U.S. infrastructure and (6) Raise the minimum wage.

Senate Republican priorities include (1) Confirm President Trump’s nominees, (2) Balance House Democrats’ oversight, (3) Improve infrastructure, (4) Support Trump’s border wall proposal, (5) Lower drug prices and roll back Obamacare and (6) Defend tax reform.

The number of voters identifying themselves as either Republican or Democrat has shrunk in recent years with a rise in those claiming to be Independent, Richter said. The Republican and Democratic parties will be in competition for these Independents as they could likely affect the outcome of the 2020 Presidential election.

Richter noted that a January 2019 rating of the 2020 Electoral College showed 232 solid or likely Democratic states with 220 solid or likely Republican states — leaving 86 Toss-Up states of Arizona, Florida, Michigan, Pennsylvania and Wisconsin. There are 538 members of the Electoral College who will vote to certify the Presidential election. A majority of 270 is needed to win.

+ posts

More articles

Latest article