As the world looks for more food supply, the U.S. is in line to be a provider. This is evident in pork and beef exports. While the actual supply numbers for beef have yet to exceed the pre-mad cow era that ended in 2003, the value of beef exports have matched or exceeded those levels. In fact, the value of exports exceeded 2003 for beef in mid-2008. However, after a tough world economic recessionary period, export values declined significantly into early 2009. Since then, the market has continued to see a gradual increase. 

To give some perspective, the value of exports in 2003 topped $300 million for beef. After mad cow concerns, the value of exports dropped to nearly zero in early 2004. A steady increase into the middle of 2008 again put export values well over $300 million. However, as economic calamity saw most markets in the U.S. and worldwide collapsing in 2009, export values decreased to $200 million. Since early 2009, export values have crept up to $300 million. 

As for pork, the trend has been much different. Export values in 2003/2004 were about $125 million. That increased with a significant rally in export activity into 2008 when values topped at just under $400 million. The recession was also felt in the pork industry with a drawdown of about $250 million in exports in mid 2009. Since then, exports have recovered with 2010 seeing about $330 million.

The world is in need of increased protein supplies, and the U.S. has availability. However, as prices move higher, the effects could be a decreasing demand market here in the U.S. and eventually on the world market. With a decreasing cow herd size, however, it's unlikely that cattle prices will make a significant downturn in the near term, especially if the world is pulling out of an economic recession. Tight credit and high input costs are keeping lenders reluctant to extend credit. This too will keep prices supported.

If you have comments, questions or suggestions, contact Bryan Doherty at 1-800-Top-Farm, Ext. 129. 

Futures trading is not for everyone. The risk of loss in trading is substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Past performance is not necessarily indicative of future results.