CME: Some Realities to Face in Coming Months

Tag : protected amino acids


In spite of yesterdays great news regarding exports, some newrealities will likely take some luster off of U.S. meat andpoultry export figures in months to come. We hate to rain on theparade, but anecdotal evidence from industry participants leads usto believe that exports for May (and perhaps June) will not benearly as strong as they were in April. The primary culprit isshipping patterns and the related issue of shipping containers.Again based on anecdotal evidence, shipping firms have apparentlyfound more profitable routes and products for their services inrecent months, especially with the low value of the U.S. dollar.Their response to these more lucrative hauls and lower imports havecreated a shortage of containers and that, in turn, is a driver ofhigher frozen meat and poultry inventories the past two months.U.S. export customers find themselves in the unenviable spot ofowning frozen goods in U.S. warehouses and having no containers toput them in. The inability to convert inventories to cash isalready having major impacts on export customers liquidity levels.These issues will be solved as U.S. shippers pay more for services but it will take awhile for those increases to filter through themarket.