Americans’ love of meat is expected to hit a new high, according to a projection from the USDA. The government agency expects Americans to consume an average of 222 pounds of red meat and poultry during 2018.
Average consumption has risen 12 percent since 1990, a sign of increasing prosperity, desire to eat more protein, and American overindulgence.
During the same period, U.S. meat production jumped by 66 percent and should surpass 100 billion pounds for the first time ever. This excess production is being sold to foreign buyers, making Midwestern farmers and ranchers increasingly dependent on shoppers in Japan, Mexico, or South Korea, three of the major markets for U.S. pork, chicken, and beef.
As of midday Friday, February cattle futures traded for $1.20 per pound, while February lean hogs were worth 71 cents, levels that could continue to encourage consumption. Longer term, however, American consumption could plateau if shoppers eat more meat alternatives or cut out meat entirely.
Steak consumption is often linked to a rising stock market, so many ranchers keep an eye on Dow Jones futures as they watch cattle prices.
Oil prices pumped up
Crude oil gushed to a three-year high this week, topping $62 per barrel on Thursday as protests swept across Iran. The Middle Eastern nation is the world’s fifth-largest oil producer, and political unrest there is concerning markets.
Tens of thousands of Iranians are in the streets protesting the government for financial mismanagement, a poor economy, and repression. Unrest or heavy-handed responses by the government could threaten stability in the region or the viability of the nuclear deal signed in 2015.
These threats could add further pressure to a global oil market that is already in short supply after a year of production cuts from OPEC.
Oil prices were further supported by bitter cold temperatures that swept across the U.S. this week. As the mercury dropped, homeowners cranked up the heat, drastically boosting their consumption of heating fuels.
While most of the country depends largely on natural gas for home heating, the Northeast gets almost 25 percent of its heat from heating oil, a derivative of petroleum that is essentially the same as diesel fuel. The Arctic blast hitting the East Coast has boosted heating oil demand, rocketing that market near a three year high, with futures spurting over $2.09 per gallon.