Outlook

Latest US Department of Agriculture (USDA) reports, and other news · US pork exports improve · China to buy more pork for state reserves · African Swine Fever ...

Their outlook is for beef and veal prices to rise between 6% and 7% in 2022 (3% to 4% prior), with pork prices seen rising 4% to 5% (3% to 4% prior) and other meat prices are expected up 3.5% to 4.5% (2.5% to 3.5% prior). USDA initially expected beef and veal and pork prices to be up 2% to 3% in 2022. Nine pork packing plants that had adopted the NSIS — six of which were operating with faster line speeds — were allowed to apply for the program, under which they need to collect data on the effects of the faster speeds on workers and share it with USDA and the U.S. Occupational Safety and Health Administration. The information could be used to formulate a new regulation for allowing plants to run faster line speeds. For 2022, USDA has already increased its forecast for all food price inflation in February, March and April, after starting from a level of 2% to 3% in July 2021. Typically, USDA’s forecasts for all food and grocery store prices stay steady in September-December. Restaurant prices, however, are subject to later upward revisions with the final increase coming in November or December. USDA’s Food Safety and Inspection Service (FSIS) on Friday announced it approved the Clemens Food Group pork packing plant in Coldwater, Michigan, to run faster line speeds under a one-year trial program. Given that food price inflation on a monthly and annual basis has not eased, look for USDA to continue increasing their forecasts ahead. The food-away-from-home (restaurant purchases) CPI was 6.9% higher than March 2021 while food at home (grocery store) prices were 10% higher than one year ago in March. Factors causing the increased food price inflation, according to USDA, will be upward price pressures from the Ukraine conflict but downward price pressure from recent increases in interest rates by the Fed. “The situations will be closely monitored to assess the net impacts of the concurrent events on food prices as they unfold,” USDA said. Dairy prices are now seen up 6% to 7% in 2022 compared with 2021, up from 4% to 5% in March. USDA started its 2022 expectations for dairy product prices to be down 0.5% to up 0.5%. The Consumer Price Index (CPI) for all food increased 1% from February 2022 to March 2022, and food prices were 8.8% higher than in March 2021. The 20-year average for food price increases at 2.4% for all food, 2.9% for restaurant prices and 2.0% for grocery store prices means the current outlooks are for costs that are at least double those averages. USDA Thursday reported US pork net sales of 31,500 MT for 2022 were up noticeably from the previous week and up 19 percent from the prior 4-week average. The contra-seasonal nature of the latest declines probably spurred selling since it’s common for hog prices to gain this time of year.