June 22, 2009 – Animal agriculture may be in the early days of a profound shake-up/shakeout as a result of the world financial crisis.
In the U.S., total meat consumption is falling. It is down an estimated five per cent and dropping.
The cause isn’t primarily a shift in food preference of an aging population – though that has long been expected. Analysts believe that the economic toll of the recession – especially the damage to employees in the manufacturing sector – is forcing many of the industry’s best customers to opt for lower cost food.
Meanwhile, oceans away China and Russia have reportedly decided to support their meat industries – particularly poultry and pork. The goal is to produce more, employ more people and import less. China has also been looking increasingly to Brazil for chicken.
If these moves are successful – and the Chinese have been successful at virtually everything they’ve tried in recent years – this could put even more pressure on U.S., industry.
In the mid-to-long term, the U.S. industry would have to contract. In the shorter term, U.S. companies could end up fighting over the shrinking markets in a battle to determine the fittest.
It is the short term that could be a threat to Canadian producers. If the U.S. dollar drops in value and U.S., companies engage in a particularly vicious price war, Canada may look like a close and convenient dumping ground.
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