It’s well-known by now that the U.S. cattle herd has been shrinking for the last several years. However, livestock liquidation is also happening in other countries. Brett Stuart, founder and president of Global AgriTrends, says there are many examples of smaller livestock production overseas.
“Australian cattle and sheep have been in liquidation. They have shrunk that herd. Their prices have been dismal. Margins have been negative. Brazilian cattle. We estimate that slaughter will be down to 11 percent by 2026. Chinese hogs. Disease issues. Weak demand. Oversupply. They have been losing money consistently now for nearly two years. They will be in liquidation. They probably are right now. China hogs are the largest hog base on Earth. The second is Europe. They’ve had significant liquidation. They’ve liquidated double-digits in their swine herd. Their production is now down eight percent year to date. The global protein space, the livestock space, is all in liquidation at the same time.”
And it’s not just the U.S. beef herd that’s contracting.
“U.S. hogs. Financial losses, eight, now nine out of 11 months. The Hogs and Pigs Report showed very slight liquidation, but we are going to accrue losses over the winter and continue to liquidate. U.S. chicken, you can see the processor losses. Those publicly traded companies have been losing money in 10 out of the last 12 months. Egg sets went negative in September. They’re starting to tighten the supply.”
A shrinking protein sector around the world isn’t good news as the global population continues growing.
“We are shrinking global protein production all over the world at the same time means there’s probably some profit out there, right? We’re going to fix this thing, and we’re going to learn to deal with inflation by tightening supplies and raising the cost.”