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Market Intel Weekly Nugget

The Cow-calf Producers Profits are improving!

The latest data analysis from the Livestock Marketing Information Center (LMIC) shows rising profit margins and improved economic conditions for cow-calf operators in the U.S. beef industry.

Better Margins Ahead

• Estimated average annual cow-calf margins are forecasted to reach $158 per bred cow in 2023, up from $123 in 2022.

• If realized, 2023's margins would be the highest since 2014's record of $284 per bred cow.

Calf Prices Climbing

• The main driver of the higher margins is stronger calf prices, projected to average $205 per cwt (hundredweight) in 2023.

• This represents a $28 increase compared to the $177 per cwt average in 2022.

Moderating Costs

• While costs remain elevated, feed and other operating expenses are expected to moderate slightly in 2023 after peaking in 2022.

• The estimated cost of producing a calf in 2023 is $692, down from $706 the previous year.

Regional Differences

• Not all regions will see the same degree of margin improvement due to varying input costs and calf prices.

• The Southern Plains is projected to have the highest 2023 margins at $180 per bred cow.

How this affect to other Protein Markets?

Pork Market Impacts:

• Higher beef prices and profitability could make pork a more attractive affordable protein choice for some consumers if they switch due to price sensitivity.

• This could boost demand for pork and support hog/pork prices.

• Pork producers are facing elevated feed and operating costs, which could offset some of the demand-driven price increases.

Chicken Market Impacts:

• As one of the most cost-effective proteins, chicken demand could get a boost if consumers trade down from higher-priced beef to stretch their meat budgets.

• Like the pork industry, chicken producers are also challenged by high feed costs cutting into their margins.

• If beef production does get constrained by any supply factors, chicken could help fill the protein supply gap for consumers.

Overall Market Dynamics:

• Profitability and pricing in one protein sector like beef impacts the competitive landscape across all three major meat markets (beef, pork, chicken).

• As consumers adjust purchasing behavior based on affordability, we could see demand shift between proteins based on their relative prices.

• But on the supply side, all producers are still facing significant headwinds from elevated input costs that make it difficult to meaningfully expand production.

Culture: Pork’s Irresistible Global Appeal

Last week I went deep into how consumers taste evolve through generations. This week I want to talk about the meat consumptions patterns across different cultures, age and regional markets, specially for Pork Meat.

While beef and chicken reign in some markets, pork has an immense global fan base deeply rooted in rich cultural traditions that span centuries. For savvy meat suppliers, understanding these influences is key to capitalizing on pork's insatiable worldwide demand.

Asia's Pork Obsession

Across Asia, pork dishes aren't just meals - they're integral to social fabric and national identity.

Asian cuisines have helped cement pork as the world's most consumed meat. In China alone, pork accounts for over 63% of total meat consumption driven by its central role in iconic dishes. Similarly in Vietnam and the Philippines, pork is engrained in the national culinary identities.

Across Asia, pork's versatility in preparations like dumplings, sausages and stir-fries has made it an irreplaceable part of the food culture. Religious exemptions for Buddhism and Islam have done little to curb pork's popularity in the region.

Europe's Hammy Heritage 

Pork's significance also runs deep through Europe's culinary heritage. In Germany and Poland, pork is fundamental to sausages like bratwurst and kielbasa. For Spain's famous jamon culture, the unique Iberian pigs are a source of national pride.

Pork's affordability and taste helped solidify its place in European food traditions over many centuries. Even with the rise of Muslim and vegetarian populations, pork still makes up over 1/3 of total meat consumption in the EU.

The Americas' Porky Melting Pot

On the other side of the Atlantic, pork's colonial ties to Spain, England and beyond ensured it was quickly adopted into First Nations foodways. From Virginia's cured country-ham traditions to Mexico's crispy carnitas, indigenous cultures embraced new pork innovations.

In recent decades, flourishing immigrant communities further accelerated pork's appetite across North and South American markets. Hispanic, Asian and Halal food scenes introduced new beloved pork specialties:

• Filipino lechon (spit-roasted pig)

• Vietnamese banh mi sandwiches

• Peruvian chicharrones (crispy fried pork belly)

Pork's Ageless, Borderless Allure

Examining these deep cultural currents helps explain pork's consistent popularity across global age groups. While older consumers remain loyal fans, younger urban cohorts are updating pork's cool-factor.

Food trucks, brewpubs and TikTok trends celebrating creations like pork belly baos, beer-candied bacon and chorizo burgers all signal pork's enduring relevance to adventurous millennial and Gen Z "pork-fluencers".

Did You Know? 👀 

There is Sushi of Iberico!

I found this short made by Foodwithbearhands which got my attention. He found a very interesting way to eat Iberico. Many more restaurants might should join and do put it as an appetizer! ENJOY!

One last thing…

If you are aiming to strengthen your business foothold in the APAC Market in this areas:

• Market Expansion and helping with client Acquisition

• New Market Fit with product/specification development

• Sales Growth and Price Optimization with Market Intel

• Sales Training and objection ideation to gain new clients

There are 3 ways that Meat Trading Hub (MTH) can help you when you are ready:

✅Your Supply and Purchasing Advisor 1:1

✅I create win-win partnerships between you and strategic importers and/ or suppliers

✅On-line/off-line Sales Training sessions to elevate your Global sales team

Schedule a discovery call. Though times are coming and we all need to source and sell with better margins, right?