SRM ban could affect milk production, raise poultry costs

Nation's Restaurant News, Feb 23, 2004 by John Barone

Pork--According to the USDA, if producers follow through on their stated breeding intentions, pork production could reach a record 20 billion pounds in 2004, roughly 1 percent higher than in 2003. Hog prices will average about 2 percent below those in 2003. High beef prices and an anticipated increase in foreign demand for U.S. pork should help support pork and hog prices this year. Pre-Easter buying has arrived. During the past month buyers took advantage of a mid-January price dip, pushing ham prices higher. Pork bellies hit a one-year low of about 78 cents a pound in late January but recovered to reach the low 90s in early February. January's USDA cold-storage report showed pork bellies stocks at a six-year high. Belly prices should settle back into the mid-80s by March.

Poultry--During the last month outbreaks of avian influenza in poultry have been reported in Cambodia. China, Indonesia, Japan, Laos. Pakistan, South Korea, Taiwan, Thailand and Vietnam. Roughly 60 million chickens in those countries have been killed so far in an effort to contain the disease. Now an outbreak in Delaware has led most countries to ban American poultry imports. In January U.S. chicken exports had increased in response to strong Asian demand. That helped boneless, skinless breast prices jump from $1.47 per pound to $1.81 in early February. Prices at that level had not been expected until summer. Dark-meat prices also were up 12 percent to 15 percent. But the ban on U.S. poultry is likely to take the steam out of chicken prices.

John T. Barone is president of Market Vision Inc. and author of the monthly Commodity Update and Weekly Market Fax. He can be reached for further comment at John.Barone@MktVsn.com. or at (973) 882-9888.