September 14, 2009

Struggling US livestock producers may find recovery a slow process that is led by rising demand from foreign markets, according to a study by Kansas City Federal Reserve economists.

In the study released Friday (September 11), economists Brian Briggeman and Jason Henderson of the Fed's Omaha branch say a rebound in protein demand is the only thing that will pull producers out of the money-losing situation that many find themselves in.

But while the US economy shows signs of recovery, the changes in consumption habits may not be enough to be felt to any great extent at the farm and ranch levels, the economists said. Instead, stronger economic growth in developing countries could change the fortunes of US producers.

As foreign economies emerge, consumers there could have some of the fastest-rising disposable incomes in the world, with per capita meat consumption patterns to match, they said.

The trick for US producers will be to target their products to the tastes of consumers in those emerging economies, the economists said. They must continue to create new products for new consumers in spite of higher costs at home that have forced many to trim herds and flocks.

The US Meat Export Federation is assisting US livestock producers through various promotional campaigns for new products, the economists said.