The tighter global corn supply, a result of flooding and delayed planting in the U.S., is occurring simultaneously with China’s increased demand for imported pork due to African swine fever (ASF) losses. This is reportedly causing concern amongst hog producers in Brazil and elsewhere. Indeed, livestock producers are said to be at risk because of the impending higher feed costs. However, meat demand and, consequently, livestock profitability should be a byproduct of broader economic growth rather than strictly feed costs. In fact, global pork production appears to be rather impervious to the corn production situation (see graph below). Its upward trend did not waiver when corn stocks were tighter between 2003 and 2010. For that matte...
From WPI Consulting
Communicating importance of value-added products
Facing increasing pressure to quantify the value of export promotion efforts to investors, a U.S. industry organization retained WPI to develop a quantitative model that better communicated the importance of exports. The resulting model concluded that value-added meat exports contributed $0.45 cents per bushel to the price of corn, increasing support for that sector’s financial support of WPI’s client. In addition to serving the red meat industry with this type of analysis, WPI has generated similar deliverables for the U.S. soybean and poultry/egg industries.