Exports also contribute significant value for by-products. A number of factors can impact the trade outlook and, in recent months, many of those factors have been bearish for US meat exports while continuing to drive beef imports.

As we contemplate the outlook for meat trade in 2016, we outline the situation in some key areas and what we could expect going forward.

The US dollar has strengthened considerably in the last 12 months and this has made US products more expensive relative to products supplied by other major world exporters.

Yesterday the US dollar index dropped sharply as currency traders were disappointed that the European Central Bank did not cut rates more aggressively. However, this is more of a short term event and it is important to consider what is happening globally at this point.

The European Central Bank has pushed interest rates in negative territory. In other words banks have to pay in order to park their money with the ECB. In the US, however, the US FED is poised to raise rates.

It is reasonable to expect that the widening spread between European and US rates will increase demand for US denominated assets, in the process pushing up demand for US dollars and increasing the value of the US currency.

Given the monetary stance of central banks on both sides of the Atlantic, it does not appear that this dynamic will change in 2016.

Why does this matter for US meat exports?

The European Union is one of the largest world traders of pork. Over the summer there was plenty of speculation that booming China demand for pork would lead to more exports to that market.

However, while China has indeed imported more pork than the previous year, much of their business has gone to the EU rather than the US. European pork prices are down now that Russia has stopped buying their products but a weaker Euro also has helped considerably.

The US dollar has also appreciated significantly vs. the Brazilian Real. Brazil is a global powerhouse in terms of beef, pork and chicken production and exports.

Since July 2015, the US dollar has gained 175 per cent vs. the Brazilian currency. Recent economic data from Brazil show that they are now mired in the worst recession since the 1930s.

Brazil has not been able yet to capitalise fully on this weak currency and there has been some surprise as to why their exports have not increased. But recently Brazil shipments have increased and they should expand further. After all, they do have meat to sell.

The Brazilian cattle herd continues to grow and Brazil has gained access to the Chinese market. Brazil also has been approved to ship beef to the US but trade remains in limbo until plants are certified by FSIS. The weak Brazilian real could bring more beef to the US despite quota limits.

The appreciation of the US dollar has further compounded problems for the US chicken industry, which lost access to some markets due to Bird Flu.

Lower global grain prices and weak economic growth in key emerging/developing markets, including Russia, have also negatively impacted global meat protein demand and hurt US meat exports. The decline in grain prices has encouraged expansion in a number of other markets, especially for chicken.

Lower oil prices have also negatively impacted demand from countries that are large world meat importers. Russian beef and pork imports from South America are down sharply and even as China has become a significant buyer there, that does not replace the Russian business on a world scale.