GLOBAL POULTRY TRENDS 2012 - Poultry Increases its Share of Global Meat Production03 July 2012
Forecasts point to a further two per cent increase in poultry meat output worldwide this year, writes seasoned industry watcher, Terry Evans. Our Global Poultry Trends series for 2012 starts with his analysis of chicken meat production trends in Asia.
Although the annual growth in poultry meat production has slowed to a little under two per cent, the estimate of output in 2012 by the Food and Agriculture Organisation (FAO) at 103.5 million tonnes (table 1) represents a further slight increase in poultry’s share of global meat production (excluding fish) to a record near 34.3 per cent.
While bovine meat (beef and veal) output is expected to stagnate this year at around 67.5 million tonnes, pig meat production is forecast to expand by some 2.6 per cent to 111.7 million tonnes, though almost entirely due to an increase in China.
Looking to 2013, global poultry meat output will likely approach 106 million tonnes.
Over the past 12 years or so, chicken meat has increased its share of world poultry meat production from less than 86 per cent to the current estimate of almost 88 per cent. Global chicken meat output increased by 27.5 million tonnes between 2000 and 2010, equivalent to an average annual growth rate of almost four per cent. Although the rate of expansion has almost halved since then, output in 2012 should total around 91 million tonnes (table 1 and figure 1) and approach 93 million tonnes next year.
Regarding international chicken meat data, it should be noted that the figures released by the FAO are for all chickens (table birds and culled layers) while the data released by other authorities such as the United States Department of Agriculture (USDA) and the Food and Agricultural Policy Research Institute (FAPRI) do not include estimates of the meat from culled layers.
The five major regions shown in Table 1 have exhibited differing rates of growth. Based on figures expressed to the nearest 100,000 tonnes, over the period 2000 to 2010, both Africa and Asia have recorded increases of around 4.5 per cent a year, while growth in the other regions has been below four per cent, averaging 3.9 per cent in Europe and 3.5 per cent in the Americas.
Since 2010, all the regions have recorded slower growth rates, reflecting lower profitability in the face of higher costs – principally feed – while in some countries, disease outbreaks have also played a role in this scenario.
Chicken meat production throughout Asia rose by some 10 million tonnes between 2000 and 2010 from 18.7 to 28.6 million tonnes (Table 2). A key factor to note here is that the data for India released by the FAO last year (which we did not publish in our report) have been revised sharply upwards and as a result, India has regained her position to the number two spot in the rankings (table 3). The latter reveals that in 2010 eight countries, all producing more than a million tonnes of chicken meat a year, had a combined output of 22.8 million tonnes or almost 80 per cent of the regional total.
China is easily the leading producer in Asia. However, a glance at Tables 2 and 4 shows that estimates of output vary quite markedly depending on the source, underlining the importance of treating all data with a degree of caution as the margin of error can be quite large.
An additional problem regarding data for China is knowing if the figures relate just to mainland China or whether they include Taiwan, Hong Kong and Macao. FAO’s production data normally includes Taiwan, Hong Kong and Macao with what is called mainland China. However, both USDA and FAPRI chicken production figures for China exclude Taiwan, Hong Kong and Macao.
The USDA and FAPRI consider that chicken meat production in Taiwan is in the region of 550,000 tonnes. And if this is added to the mainland China estimates, then total output in say 2010 would amount to around 13 million tonnes, which contrasts starkly with the FAO total for China for that year of 11.84 million tonnes.
Using USDA data, then production in mainland China will grow by almost four per cent this year to around 13.7 million tonnes and will likely rise to almost 14.3 million tonnes in 2013 (Table 4 and Figure 2). However, using the FAO data, the corresponding figures would be around 12.1 and 12.6 million tonnes, respectively. The FAO figures have been used for our regional and world calculations as this puts all the data on the same basis.
Chicken meat is the second most important form of animal protein in China behind pork. High pork prices for most of 2011, coupled with fewer chicken imports, have given broiler production in China a boost of some four to five per cent this year. This expansion will benefit the larger commercial operations which tend to be in isolated areas and have a relatively high level of biosecurity. These are expanding their share of total output at the expense of smaller units and backyard flocks which are more susceptible to the greatest avian disease threat in Asia – H5N1 highly pathogenic avian influenza (HPAI).
However, a fall in pork prices in the last quarter of 2011 dampened the demand for chicken, bringing about a drop in prices that caused some chicken producers to slaughter birds prematurely, resulting in lower average slaughter weights and hence a slight cutback in the estimated output for this year from 13.8 to 13.7 million tonnes.
Growth in China’s economy has slowed in recent years though it is still at a ‘high’ of nine per cent. All sectors of the meat industry have benefitted from the increase in real incomes but while poultry production will continue to expand in the near term, it is considered that growth will not match the annual average of 4.3 per cent per year achieved since 2005.
Table chicken production in India has been expanding at around 10 per cent a year for more than a decade. Although the estimates of annual output differ between FAO and the USDA, both sets of figures point to a similar growth rate. As a result, whereas production in India back in 2000 was around 10 per cent that of China, by next year, this proportion will have increased to around 25 per cent!
India’s industry is highly organised, the commercial sector accounting for 85 per cent of total output, two-thirds of which comes from integrated operations. While the production sector is highly sophisticated, it is estimated that no more than 10 per cent of the birds are processed in modern facilities as some 90 per cent are manually killed at the point of purchase by the shopper. The live-bird market holds this dominant position because householders consider these birds to be free from disease, fresher and more hygienic than processed chicken.
Furthermore, it appears that the market share of the processed sector in India, which mainly services the hotel and institutional sectors, is declining because it is not growing as quickly as the live bird trade. That the cold-chain infrastructure is inadequate is yet another barrier to the expansion of the processed bird business. Although there were some outbreaks of HPAI last year, according to a USDA GAIN report, they did not have significant economic or production consequences. With continued good growth anticipated, output in 2013 will certainly exceed three million tonnes while, based on USDA estimates, a total of 3.5 million tonnes is possible (table 4).
The past decade or so has witnessed dramatic changes in the livestock sector in Iran, with a pronounced shift towards expansion and a switch from multi-purpose farms to single stock units. Industrial production of livestock is increasing with a commensurate reduction in production from mixed-farm systems. The poultry sector has mirrored this trend, shifting from an extensive farm operation to complex vertically integrated enterprises. The industry is generally in private hands. Between 2000 and 2010, chicken meat output more than doubled from just over 800,000 tonnes to 1.65 million tonnes, putting this country in joint third position with Indonesia in the production rankings (tables 2 and 3).
For Indonesia in 2010, the USDA puts broiler output at 1.47 million tonnes. As it appears that slaughterings in that year could have been around 1,200 million, the average slaughter weight would have been around 1.2kg. However, for the same year, FAO reports that some 2,200 million chickens (broilers and hens) were slaughtered, yielding 1.65 million tonnes of eviscerated meat at an average weight of only 0.75kg per bird!
Chicken meat production in Turkey grew by around eight per cent per year throughout the period 2000 to 2009, while 2010 witnessed a dramatic near 12 per cent gain. This looks to have been followed by a much more moderate increase this year of less than five per cent. Nevertheless, it is likely that by 2013, annual output will have nearly trebled when compared with 2000.
Outbreaks of HPAI and the earthquake in Japan hit chicken production such that estimates for 2011 point to a larger than four per cent cut–back. A recovery of almost three per cent is anticipated this year. But, even with further gains in 2013, total production will likely be only a shade over 1.3 million tonnes, which is well below the levels record in the late 1980s ad early 1990s.
The chicken industry in Thailand continues to prosper, with output climbing from its low of only 0.9 million tonnes in 2005, as a result of HPAI with its adverse effect on both production and trade, to reach an estimated 1.35 million tonnes in 2011. This year, the total could reach a record 1.5 million tonnes as both domestic consumption and exports are expected to increase. This is particularly the case for the latter in the light of the news that the European Union will accept imports of frozen uncooked chicken from Thailand from 1 July 2012.
Although not exhibiting rapid growth, the broiler industry in Malaysia is progressing steadily towards the one million tonnes a year mark, while total chicken meat output should come close to 1.5 million tonnes this year, based on the FAO stats.
As in other countries, chicken production growth has been less rapid in recent years in the Philippines and South Korea. Annual outputs will next year amount to some 750,000 and 600,000 tonnes, respectively, while in Myanmar, the total could come close to 900,000 tonnes.