North American Agribusiness Review August 2022

This periodical update provides a market outlook for dairy, cattle, wheat, and other key commodities, and gives an overview of what developments to watch in the upcoming months in North America.

- Economy: The US economy had two consecutive quarters of negative GDP growth, which means a ‘technical recession’ in the first half of this year.

- Logistics: In contrast to dry container rates, global reefer rates are expected to surge another 9% over the previous quarter in Q3 2022 before normalizing.

- Consumer Retail & Foodservice: First reports indicate the higher prices are already affecting consumers’ purchasing decisions for food staples.

- Cattle: Drought continues to alter supply flows for US cattle producers. Only the 2006 and 2012 drought covered a larger percentage of the cowherd.

- Corn: US corn crop conditions continue to deteriorate and are at the lowest level since the drought year of 2012.

- Dairy: Exceptional milk and dairy product prices have contributed to July’s nearly 15% YOY increase in the Consumer Price Index for dairy products, which is weighing on demand.

- Feed: Fats and oils remain a top concern despite the recent decline in prices, especially on the vegetable oil market.

- Pork: Hog markets hit record August highs on tighter-than-expected hog supplies and good packer demand, but packer returns weakened, as pork cutout values failed to keep pace with hog market gains.

- Vegetables: Unlike the beginning of the year where fresh produce inflation was mostly driven by fruit, it was vegetables that drove the category's inflation in June.

- Wheat: The war in Ukraine continues to hold an oversized influence on the world’s wheat market, and wheat crops have been some of the most impacted by La Niña.

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