After a year of headwinds in 2020, USDA is forecasting a brighter picture for the livestock industry. During USDA’s Outlook Forum, Chief Economist Seth Meyer says USDA is expecting growth in nearly all livestock categories for 2021.
“This is kind of a combination of what has been robust domestic demand despite a contraction in 2020 GDP and also supported by good exports,” said Meyer.
A combination of strong domestic demand and good exports are what’s needed to achieve these prices. For example, China’s hog herd has been rebounding after African swine fever decimated half their hogs. That bounce has been happening quicker than expected, but they’re still relying on U.S. pork.
“Much of what has absorbed that growing pork production since 2016 has been a fair amount of exports, and we expect that to continue in 2021 ease a little bit perhaps,” said Meyer. “Maybe the Chinese market softens a little bit, maybe gain back the Mexican market a little bit, but we need those exports given the increase in production we’re observing in order to maintain those prices.”
Meyer and USDA are forecasting an increase in domestic meat consumption for 2021.
“We’re projecting that robust demand will continue in the face of rising GDP even though we may see disposable income moderate a little bit,” he said.