Fitch: Protein industry indicators mainly positive

by Erica Shaffer
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Fitch Ratings expects the US protein industry to have a profitable 2015.

CHICAGO – The protein industry has started 2015 on a positive note, Fitch Ratings reported.

Recent trends in beef, chicken and pork segments are mainly positive. The ratings agency expects good demand, lower costs for feed and modestly higher supplies of major proteins to result in improved profitability across most segments of the protein industry during 2015. Tailwinds include lower-cost corn, which is likely to result in increased production of chicken and pork. Gains in chicken and pork supplies will be partially offset by declines in beef as ranchers rebuild their herds, Fitch noted.

“Consumer bias toward protein-rich foods and an improving US economy should support domestic protein demand through 2015, despite another round of higher than normal retail price inflation,” the ratings agency said. “However, near-term uncertainty exists for exports due to a strong dollar, China's ban on US chicken, and disruptions at West Coast ports.”

Fitch added that smaller freezer stocks for chicken, beef and pork all remain down compared to the prior year leaving no immediate backup in supply and the potential for stronger prices for proteins in 2015.

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