TL;DR: USDA grant delays impact meat processors amid declining livestock inventories and potential price hikes.
Funding for Meat Processors
US meat processors and equipment makers have experienced significant delays in receiving federal grants for plant upgrades and equipment purchases. These funds were meant to facilitate expansions and modernizations.
Reasons for Delay
The USDA’s March Cold Storage report shows a decline in red meat supplies, touching a 23-year low with 1.05 billion pounds stored. Meanwhile, poultry stocks are steady at 1.03 billion pounds.
Industry Impact
The livestock industry’s shrinking inventories are notably impacting these numbers. The March Cattle on Feed report indicated a slight increase in cattle on feed, hinting at ongoing industry liquidation, which could affect beef prices.
Challenges in the Pork and Poultry Sectors
The pork sector saw a modest inventory rise, as noted in the Quarterly Hogs and Pigs report. Despite challenges like Proposition 12 and avian influenza, poultry has shown resilience with an increase in broiler and egg production.
Looking Ahead
These declining inventories suggest potential price hikes across all sectors, posing challenges for domestic and global demand.
