The forward agricultural market made a giant leap up in 2021. The quoted prices of many agricultural crops and their products rose by tens of percent by the end of the year. The meat segment of the market was no exception. This was a result of the actual negative events in the world, such as the COVID-19 pandemic, African swine fever, the summer drought in the Northern hemisphere, the gas crisis in Europe and many other factors. The rise in prices for feedstock led to a significant increase in the cost of production of meat and its products. The forward market immediately reacted to those events by rising. In 2021, however, the forward market found meat tasteful again after the stock-exchange failures in 2020. The COVID-19 pandemic, African swine fever and green food propaganda couldn’t stop people from eating hamburgers, steaks and skewers. The quoted cattle meat prices on live weight basis and cattle meat prices on feed rose by one level, by more than twenty percent. The pork quoted price increase was lower – just above fifteen percent.
The minimum annual level of the quoted prices of cattle meat and pork was seen in the beginning of January. The quoted cattle meat prices on live weight basis decreased by January 15th to 1.182 US dollars per pound, while the quoted cattle meat prices on feed reached 1.3582 US dollars per pound. As it turned out, at the end of the year these figures were the lower price caps for this type of meat. The pork quoted prices occupied the annual minimum positions even earlier – on January 8th – 0.687 US dollars per pound.
These two types of meat reached their highest positions at different times at the end of the year. The quoted cattle meat prices on live weight basis reached the annual record level by November 26th – 1.412 US dollars per pound, while the quoted cattle meat prices on feed reached that level by December 31st – 1.6995 US dollars per pound. The pork quoted prices reached the maximum level much earlier. Their rise, however, was only temporary due to China’s high demand for pork in winter and spring. In mid-March, the pork quoted prices passed the price cap of one dollar per pound. Pork reached its maximum levels in early June – 1.206 US dollars per pound on June 4th. In July, pork went beyond the price cap of one dollar per pound. After that, the pork prices mainly plummeted.
In January, the quoted cattle meat and pork prices showed mixed results. Although the quoted cattle meat prices were rising and the quoted pork prices were falling in December, their development trend was different in January. The quoted cattle meat prices on feed moved in different directions during the month, but in the end they rose by more than five percent. The quoted pork prices showed the highest monthly rise – by almost 15 percent. By late January the quoted pork prices surpassed their previous January highs.
The various types of cattle meat showed different results by the end of February. The first ones fell while the second ones showed positive results. In January it was the other way around. The quoted prices of meat on live weight basis increased in January, while the prices of veal decreased. The quoted pork prices were the only ones that showed a stable and high growth for two months in a row in almost equal proportion. In January, the quoted pork prices rose by more than 14 percent, while in February their growth was a little slower. The increase in pork prices in the global market is due to the high demand for this type of meat, mostly in China.
The quoted prices of cattle meat and pork rose in March. At the same time, the pork’s growth was the highest. As mentioned earlier, the increase in pork prices in the global market is due to the high demand for this type of meat, mostly in China, which is caused by the lack of their own meat and African swine fever outbursts in this country. The quoted pork prices rose by more than twenty percent only in March. The cattle meat showed more moderate results. While the quoted prices of cattle on feed rose higher, the increase in the quoted prices of cattle on live weight basis was not so high.
In April, the quoted prices of cattle meat and pork in the forward meat market moved in different directions. The quoted prices of cattle on live weight basis and on feed went down, but in different proportions. The fall of the quoted prices of cattle on live weight basis was more significant – by almost five percent. The fall of the quoted veal prices was not so sharp. Only the quoted pork prices increased, while they showed negative results as well during that period of time. The April growth, however, turned out to be more moderate than the March rise.
In May, the quoted cattle meat prices rose again in different proportions after the April fall. The rise of this type of meat during the month was uneven, mixed with downfalls. The quoted cattle prices on feed rose above that level. The quoted veal prices decreased less than the cattle meat on live weight basis during the last month, while now it returned to its results from early April. In the second half of May, the quoted pork prices gained a second wind in growth, and continued to rise significantly during the entire month, outperforming the April rise. The growth of this meat segment was once again due to the Chinese market of pork consumption.
In June, the quoted prices of cattle meat and pork went in different directions. The pork prices were significantly lower. The quoted pork prices lost all of their May price positions in June, together with their positive results in April. This month confirmed the assumption that the forward pork market was highly overrated earlier. In June, it started moving closer to more real estimations from the beginning of the current year. Unlike pork, the quoted prices of cattle meat rose once again. The quoted cattle prices on live weight basis increased by three percent, while the quoted cattle prices on feed rose by almost four percent.
In July, the meat quoted prices kept their development trends from June. The quoted cattle prices rose once again in July, while the quoted pork prices went down. The quoted cattle prices on live weight basis rose by more than four percent in July. The quoted cattle prices on feed, on the other hand, decreased not so sharply compared to June. The quoted pork prices lost more than 15 percent of their initial value in June, and in July they continued to fall sharply – by more than twelve percent.
In August, the quoted prices of cattle meat and pork both rose. In June and July the quoted pork prices were constantly falling, while the quoted cattle prices were increasing. During the last month of summer, the quoted pork prices rose by three percent. Compared to July, the quoted cattle prices on live weight basis reduced their growth proportions almost three times. The quoted cattle prices on feed, on the other hand, increased their growth rate. By the end of August, the quoted cattle prices on feed surpassed the price maximum of 2020 and 2021, and the quoted cattle prices on feed hit new price highs for four months in a row.
The September results of the forward market of cattle meat and pork were negative. Following the August rise, the quoted prices of the two types of cattle meat and the quoted pork prices decreased in different proportions. The quoted cattle meat prices lost their entire added value in August and occupied an even lower position that in the beginning of that month. The quoted cattle prices on feed decreased the most. The downfall of the quoted pork prices was not so sharp, but no less significant. Despite the sharp increase, however, the quoted pork prices failed to regain their positions after the previous fall.
There were certain changes in the forward meat market’s momentum in October. Following the September decline, the quoted prices of cattle meat and the quoted pork prices moved in different directions in October. The quoted prices of cattle meat rose, while the pork prices decreased once again. The quoted prices of cattle on live weight basis rose by more than three percent showing more positive results compared to their downfall in September. The results of the quoted prices of cattle meat on feed were not so positive. The quoted pork prices fell more significantly in October than in the previous month – by more than ten percent.
November showed a general increase in the forward market of cattle meat and pork. The November rise of the cattle meat prices was sharper than the rise of the pork prices. The quoted cattle prices on live weight basis increased the most, surpassing their October rise. They increased by more than nine percent in just one month. The rise of the quoted prices of cattle meat on feed was not so sharp. All in all, the quoted pork prices significantly recovered in November.
In December, the quoted cattle meat prices fell down again. The quoted pork prices continued to rise, but after that they fell back to their previous level. After their decrease in early December, the quoted prices of various types of cattle meat moderately moved in different directions during the next two weeks. The quoted pork prices were on the rise. During the last week of 2021, the quoted prices of various types of cattle meat rose in different proportions, while the quoted pork prices fell down.
All in all, in 2021, the quoted prices of cattle meat on live weight basis increased from 1.1503 to 1.397 US dollars per pound or by 21.4%. The quoted prices of cattle meat on feed rose from 1.4023 to 1.6995 US dollars per pound or by 21.2%. The quoted pork prices rose from 0.7028 to 0.8147 US dollars per pound or by 15.9%.
Source: www.meatinfo.ru