Economic Projections Good News For Meat Exports
The U.S. dollar is
expected to remain weak against other major currencies through the rest
of 2017, according to USDA’s latest Outlook for Agricultural Trade report,
which is good news for a meat industry increasingly dependent on exports.
The value of the
U.S. dollar has declined substantially since the beginning of the year,
losing roughly 7 percent of its agricultural export-weighted value since
The relatively weaker
dollar primarily reflects improvements in the economic outlook of key U.S.
trading partners, particularly Europe and Japan. The dollar is expected
to generally trend weaker for the rest of 2017 but to remain strong relative
to the period preceding the dramatic strengthening that began at the end
At the same time,
world per capita GDP growth is expected to reach 1.8 percent in 2017 and
1.9 percent in 2018. This represents a broad-based pickup in growth across
developed and developing countries relative to growth of 1.4 percent in
In the key emerging
markets of Brazil, Russia, India, Indonesia, and China, per capita GDP
growth is expected to accelerate to 4.4 percent on average in 2017 and
4.6 percent in 2018.
Global trade volume
growth is expected to be strong at 5.6 percent in 2017 then retreat to
3.6 percent in 2018, USDA predicted, noting that even as growth slows in
2018, the growth rate is still strong relative to the 1.6-percent growth
in 2015 and 2016.
Per capita income
When people make
more money, they eat more meat
USDA reported per
capita income growth is expected to be strong across North America in 2017
and 2018. U.S. per capita GDP growth is expected to be 1.1 percent in 2017
and 1.6 in 2018, as the employment picture continues to improve, business
investment and consumer spending remain solid.
In Canada, stronger
household consumption, business investment, and exports are expected to
contribute to per capita GDP growth of 2.1 percent in 2017, although slower
consumption and weakening mining and energy investment are expected to
help push growth down to 1.6 percent in 2018.
Mexican income growth
is expected to be 1.2 percent in 2017 as government investment, particularly
construction, slows. Mexican income growth in 2018 will increase to 1.5
percent with momentum from stronger-than-expected fiscal expansion.
Per capita income growth
in Asia and Oceania is expected to be steady at 3.7 percent in 2017 and
Income growth in China
is expected to be 6.1 percent in 2017, outpacing predictions made earlier
in the year. Continued dollar strengthening relative to the renminbi is
anticipated, with economic growth rates decelerating as China continues
the process of increasing consumption and imports while slowing investment
India’s per capita income
growth is expected to nearly match China’s at 6.1 percent in 2017. Steady
growth is expected in the rest of South and Southeast Asia despite slowing
demand from China.
Although Latin America
is expected to emerge from recession, economic growth will be very slow
in 2017, with flat per capita income, but rebounding slightly in 2018.
The dollar is expected
to weaken against the Brazilian real and Argentine peso in 2017 as these
currencies benefit from strengthening external demand. In the case of Brazil,
while positive GDP growth is expected, it is not projected to be strong
enough to produce positive per capita income growth until 2018.
Venezuela is expected
to remain in recession in 2017.
USDA raised its fiscal
2017 outlook for U.S. livestock, poultry, and dairy exports by $200 million
from May indications to $28.9 billion on minor adjustments across most
The beef export forecast
is up $100 million to $6.1 billion as higher prices more than offset a
decline in volumes.
Poultry and poultry
products are forecast $200 million higher to $4.9 billion on higher prices
that more than offset relatively weak volumes due to lingering HPAI-related
Pork, however, is
forecast $100 million lower to $5.3 billion as a slight increase in price
is unable to offset a decline in export volume.