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2022 has brought about a highly volatile environment across
commodities markets. Inflation, which began during the pandemic and
was exacerbated by the Russian invasion of Ukraine, has sent
agriculture markets soaring. The prices of hogs, cattle, and
poultry have all increased at a rate near or higher than their
respective input costs. This has led to strong margins in the US
and in most of the world. However, declining, and sometimes
negative, margins are beginning to weigh on the livestock industry.
Looking towards 2023, we expect a confluence of factors to reduce
global livestock numbers. This is clear when examining each of the
major livestock sectors.
Global Feed Demand is likely to fall in
2023
US cattle herd, the world's largest grain-fed cattle herd, is
in contraction.
Hog herd is likely to contract in 2023 in the EU, US, and
China.
There were severe outbreaks of bird flu and HPAI in the EU and
US, and poultry inventory is already down in these regions, further
contraction is expected in 2023.
Cattle - The U.S. has the biggest grain-fed
cattle herd in the world, which is in contraction and likely to
contract in 2023 as well.
Hogs - Global Hogs inventory is likely to
decrease in 2023 as the herd is in contraction in the EU and
US.
Poultry - Global broiler inventory is likely
to contract in 2023 in Europe and USA as highly pathogenic avian
influenza (HPAI) outbreaks loom.
Recession, Inflation & Currencies - As
inflation is high all around the globe and fear of recession
continues to grow, what does it mean for protein demand and
consumption?
Effect on Grains and Meal Markets
Posted 03 August 2022 by Paul Hughes, Chief Agricultural Economist & Director of Research, Agribusiness at S&P Global Commodity Insights
This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.
