Milling & Baking News Corporate Profiles - 2017 - 38

INDUSTRY
Meat and REVIEW:
poultry
Meat and poultry

Meat and poultry
Consumer demand accelerates as market recovers
from impact of drought and avian influenza

U.S.

red meat and
poultry forecasts

2014
Production, million lbs
Beef
24,250
Pork
22,843
Broilers
38,565
Turkeys
5,756

2015

2016

2017

2018

23,698
24,501
40,048
5,627

25,221
24,941
40,695
5,981

26,559
25,841
41,290
5,998

27,275
26,715
42,275
6,180

Total red meat
and poultry 92,185

94,630

97,612

100,449

103,213

Per capita disappearance, retail lbs
Beef
54.2
54.0
55.6
Pork
45.8
49.8
50.1
Broilers
83.4
89.0
89.8
Turkeys
15.8
16.0
16.6

57.6
50.3
90.2
16.6

58.5
51.0
91.5
17.0

217.2

220.5

Total red meat
and poultry
201.8

211.1

Source: U.S. Department of Agriculture

38 \ October 2017

214.6

he market for meat protein is coming into balance. After
years of disruption, with drought devastating the beef industry and avian influenza affecting the poultry markets,
supply and demand across the various meat proteins are moving
toward equilibrium. Combine that balance with favorable market conditions and you have a recipe for success.
In early August, Tyson Foods, Inc., Springdale, Ark., one of
the world's largest processors of meat protein, issued its outlook for 2018, and it was positive.
"With ample supplies of cattle, we see very good conditions
for our Beef business as far out as 2020 as we enter the early
stages of a multiyear expansion cycle," said Thomas P. Hayes,
president and chief executive officer of Tyson Foods, during an
Aug. 7 conference call to discuss financial results. "Absent a
shock to the system such as a drought or an import ban, our Beef
business is well positioned for profitable, long-term growth."
Mr. Hayes added that the beef industry also will be helped by
the opening of China to U.S. beef exports.
"...we're proud to say that Tyson Foods was the first to arrive
in China with U.S. beef," he said. "While shipments to this part (of
the world) are very small, we're optimistic. Chinese consumers

prefer high-value cuts, and we think they'll appreciate this pure
quality of U.S. beef. (It's) too soon to know yet what this could
mean for exports, but we believe there's great potential in this.
U.S. beef export demand was up 20% year-over-year in Q3."
Mr. Hayes sounded a similar note regarding pork. While the
national herd is expanding, new processing capacity in the United States is coming on-line to absorb the increase.
"As with Beef, strong export demand was a key driver for our
Pork segment, with U.S. pork exports up 10% year-over-year,"
Mr. Hayes said. "Our operations performed very well as we've
maximized revenue and mix.
"There's been tremendous food service demand for bacon,
which was a primary driver of the increased cutout. While performance could moderate from Q3 levels as global competition increases and labor markets tighten, the Pork segment is expected
to perform well in Q4 despite pressure from competing proteins."
On chicken, Mr. Hayes said higher prices have not dampened
consumer demand.
"... Per capita consumption is projected to reach a record
high this year," he said.
Mr. Hayes' assessment of the meat protein market is in line
with data from the U.S. Department of Agriculture, which said
positive changes in 2018 per capita beef, pork and poultry disappearance are expected to be driven largely by production increases, but also changes in trade in its July Livestock, Dairy
and Poultry Outlook report.
In 2018, the U.S.D.A. is projecting per capita disappearance to
be 58.5 lbs for beef; 51 lbs for pork, the largest per capita disappearance since 2004; 91.5 lbs for chicken; and 17 lbs for turkey.

Meat protein dominates
Protein remains the on-trend ingredient in food and beverage
product development, but the focus during the past few years

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