Meat+Poultry - December 2016 - 34

INDUSTRY OUTLOOK

When asked about gross margins, 30
percent of companies expected higher
gross margins this year, while 34 percent
of companies expect an increase in gross
margins in 2017.

15%

General outlook
for the meat
and poultry
industries for
2017 compared
to 2016

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34

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35%

More than half of the companies surveyed
for the confidence study export products,
and this figure includes 78 percent of large
companies. For 2016, exporters expected
international sales growth of 5.9 percent, and
44 percent of companies surveyed expect
growth in international sales in 2017.
The US Dept. of Agriculture forecasts
agricultural exports for fiscal 2017 at $133
billion, up $6 billion from the most recent
forecast and up from a revised $126 billion
in fiscal 2016. China is projected to be the
largest US export market in fiscal 2017,
surpassing Canada.
Demand for pork in China is a significant
driver of US export gains. In 2015, US pork
producers exported 339,056 metric tons of
pork to Hong Kong, including variety meat,
with a value of $700 million, according to US
Meat Export Federation (USMEF) data.
Exports of US beef to Hong Kong in 2015
totaled 120,905 metric tons with a value of
$800 million, according to USMEF figures.
The possibility exists for more beef exports
to China after the government signaled its
intention to restore imports of US beef to the
mainland. In September, China's Ministry of
Agriculture and General Administration of
Quality Supervision, Inspection and Quarantine
said China would begin accepting US beef
from animals less than 30 months of age, but
did not specify when imports would resume.
China imposed a ban on US beef after the US
reported its first confirmed case of bovine
spongiform encephalopathy (BSE) in 2003.

OPERATIONS OUTLOOK
Hardly a month went by in 2016 when a meat
and poultry processor didn't announce plans
to upgrade existing plants or build new ones.
Processors expect the trend to continue into
2017, according the confidence study.
Sixty-two percent of companies are
planning major new capital investments next
year, with 77 percent of large companies
reporting such plans. This makes sense given
that the average for company-wide operating
capacity is 73 percent, according to the
confidence study.
Demands on processors continue to evolve
as consumers seek out better-for-you options
for meals. Among the most significant trends
to sweep the meat and poultry processing
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Meat+Poultry - December 2016

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