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Beef, Pork Prices Expected to Rise

A weak dollar will probably lead to an increase in beef and pork exports next year, which will, in turn, cause domestic supplies to decline and ultimately lead to rising prices in the U.S. as well, according to executives at Tyson Foods, who spoke with analysts during the company's fourth-quarter earnings call last week. We'll see domestic availability of protein in those two species

SPRINGDALE, Ark. — A weak dollar will probably lead to an increase in beef and pork exports next year, which will, in turn, cause domestic supplies to decline and ultimately lead to rising prices in the U.S. as well, according to executives at Tyson Foods, who spoke with analysts during the company's fourth-quarter earnings call last week.

“We'll see domestic availability of protein in those two species drop going forward, unless we see a major trend change there,” said Jim Lochner, Tyson's chief operating officer. “So that's one reason we'll look at the total supplies and look at the domestic availability shrinking throughout even though per-capita consumption [in the U.S.] will come down, I think it will be favorable to push pricing.”

Like its competitors, Tyson, the world's largest meat processor, has faced significant challenges during the past two years. In 2008, prices for animal feed and fuel soared due to factors including the ethanol boom and a speculative bubble in the commodity markets. In 2009, those input costs retreated from record highs, but sluggish export markets and a slump in demand from the U.S. restaurant industry helped hold protein prices down.

Average prices for most meat and poultry cuts have slowly declined since the beginning of the year, according to data from the U.S. Department of Agriculture's Economic Research Service. But, Tyson's beef, chicken and pork divisions each delivered operating profits during the fourth quarter, due primarily to volume sales increases.