Chinese Chickens Suffer a Bad Bout of the Flu:
We will be monitoring World Health Organization reports, as a deadly bird flu outbreak is clearly expanding in China. If 2013 is an indicator of things to come, it doesn’t bode well for the country’s poultry industry or chicken imports. At first glance, it would seem intuitive that China would simply import more chicken from abroad. However, the visceral consumer reaction to food safety concerns actually tends to suppress demand. Chinese domestic demand for chicken fell by roughly 5% between 2012 and 2014. In turn, United States and Brazil saw their exports of chicken products decline by 15% and 6%, respectively, in 2013. But the revulsion was short-lived, with US exports to China rebounding year-over-year by 16% in 2014.
The Great American Pig-Out?
With the media’s obsession over “aporkalypse,” we will be keeping a close eye on the USDA’s Cold Storage and Livestock Slaughter reports Friday. Pork bellies in cold storage dropped to a 50-year low for December resulting in a 40% year-over-year increase in wholesale pork belly prices during February. Yet,the USDA’s retail price scan, as of Feb. 10, shows bacon prices at surveyed supermarkets are up just 2% year-over-year. With peak demand season for bacon still months away, we will be equally focused on hog slaughter during what should be a seasonally slower period for production. If production bucks seasonality, we could easily be looking at a price fade-out this spring.
Rapeseed Faced Frost Risk in E. Europe During January:
The European Commission is scheduled to release its monthly crop monitor update (MARS) Monday. The most recent MARS bulletin highlighted potential frost damage across Europe after a cold front in January, but indicated the risk was minor for most of winter cereal production in central Europe. Nevertheless, rapeseed and soft wheat crops in Bulgaria, Hungary, Poland, and Slovakia may not have been so lucky, as temperatures in parts of Eastern Europe dipped to levels not seen since 1975.