Meat Exports Bolster Indiana Grain Prices
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For more than 30 years, Mark Legan has farmed in Putnam and Hendricks counties, growing about 2,100 acres of corn and soybeans and raising 2,200 sows. As a livestock producer, he has keen interest in exports of red meat around the globe. Legan also serves on the executive committee of the U.S. Meat Export Federation, a Denver-based association responsible for developing international markets for the U.S. red meat industry, including beef, lamb and pork.
“Indiana is the fifth largest state in terms of pork production in the United States. And, somewhere between 25% and 30% of the pork is being exported,” explained Legan in an interview with Inside INdiana Business. “So, if we’re exporting, close to 30% of the pigs, then that bodes well for the industry [and] gives us some market diversification around the world.”
According to the latest USMEF data, the U.S. saw record exports last year in terms of volume and value. Beef exports surpassed $10 billion and pork exports topped $8 billion, both for the first time.
“We’ve come off two years of supply chain interruptions and COVID shutdowns across the world. And then with some of the issues at the ports here in the United States, it’s amazing to me that exports have been hitting record levels, the last two years,” said Legan.
Legan’s involvement on the USMEF is to represent oilseed (soybean) producers. He says the record meat shipments support Indiana’s grain farmers.
“Last year’s record value of exports in both beef and pork added about $1.64 a bushel to the soybeans, about 12.5% of the value can be attributed directly to the exports of pork, “said Legan, who added corn prices also benefited by 12%.
Last weekend, Legan attended Commodity Classic in New Orleans, an agricultural convention that draws together national trade associations representing U.S. corn, soybean, and wheat growers. He says the Ukraine-Russia War and its impact on global trade was a key topic.
While neither country is a big importer of U.S. meat, they are both big exporters of wheat. Together, they represent approximately 30% of global wheat exports. Since the outbreak of war, wheat prices have skyrocketed.
Russia is also a major exporter of natural gas, a key ingredient in nitrogen-based fertilizers. Nitrogen is a crucial crop input for many Indiana corn farmers. When the U.S. ban on imports of Russian oil and other energy imports is in full effect, analysts say it will push fertilizer prices even higher.
Legan says he is concerned about fertilizer prices not only this year, but next.
“Even though we’re facing issues this year, personally, what worries me as about what may happen in the next year or two if that infrastructure over there is destroyed,” said Legan. “I think we’re going to see increased cost with this for some time.”
The White House says no new contracts on Russian oil will be allowed and existing contracts must be phased out within the next month.
In a conversation with Inside INdiana Business reporter Wes Mills, Legan explains how U.S. meat exports are bringing increased value to Indiana grain producers.