Meat and Meat Products

Moderate production growth; trade mixed

Major meat exporters and importers

World meat production is anticipated to expand modestly in 2013 to reach 308.3 million tonnes, an increase of 4.2 million tonnes, or 1.4 per cent, compared to 2012, according to the FAO's Food Outlook report in November 2013. Growth will be concentrated in the developing countries, which are also the main centres of rising demand.

Figure 1. Gains and losses in global meat trade

At the international level, prices have remained high by historical standards for the past two years. The FAO Meat Price Index (2002-04=100) averaged 184 in October 2013, little changed when compared to October 2012. So far this year, a reduction in feed costs has facilitated some price decrease for poultry; however, prices of the other categories of meat have remained either static, in the case of bovine and ovine (sheep) meat, or increased, in the case of pig meat.

International meat trade is forecast to reach 30.1 million tonnes in 2013 – representing 10 per cent of global production. Overall, trade is predicted to increase by 1.1 per cent, a slower pace than in 2012, and well below the rates of six per cent and seven per cent seen in 2010 and 2011, respectively. This is a reflection of improved national supplies in a number of importing countries and a fall in production in some of the principal exporters.

There are marked differences in trade in the different varieties of meat, with moderate growth forecast for bovine meat and a substantial increase for sheep meat, while poultry may remain unchanged and pig meat decline.

Poultry Meat

Production: China weighs on growth

Global poultry production is anticipated to rise by 1.8 per cent to 107 million tonnes. Unlike bovine and pig meat, growth is foreseen in both developing and developed country groupings. Competitive pricing of poultry relative to other meats is an important element in its momentum. However, while production has been stimulated by lower feed costs in many countries, disease concerns in China have limited overall growth.

Estimating 2013 output for China – currently the second largest producer but on trend to replace the United States as the major producing country in the coming years – remains difficult because of culling and limitations on the retail sale of live poultry following an outbreak of H7N9 influenza strain in the early part of the year. Furthermore, consumer confidence in poultry meat has diminished and sales have suffered. Consequently, China’s poultry output has been provisionally set as unchanged from 2012, in contrast with the 2.6 per cent increase originally projected.

The outlook is more positive for the rest of the world. In the United States, a 2.4 per cent increase is anticipated as production recovers from stagnation in 2012, aided by improved profitability.

Elsewhere, growth is forecast for the EU, Brazil and the Russian Federation and continued rapid expansion is anticipated for India. Among the top 20 producing countries, apart from the uncertainty surrounding China, only Japan might register a fall in output, of 0.7 per cent, in response to oversupply and associated reduced prices.

Figure 2. Limited supplies and strong demand sustain meat prices

Trade stalls

Poultry is the most traded category of meat, representing almost 45 per cent of total trade. While the volume has doubled over the past decade, growth slowed in 2012 and is forecast to be little changed this year.

Imports for Africa as a whole are forecast to rise by some four per cent. Among the main importing countries, Angola, Benin, Ghana and Egypt are all anticipated to purchase more, as income growth strengthens demand, while imports of South Africa are forecast to remain unchanged. In Egypt, culling associated with avian influenza, combined with FMD-induced high beef prices, have provided an additional stimulus to imports.

Imports by Asian countries, the main trade destination, are forecast to be little changed.

While slight to moderate growth is foreseen for Saudi Arabia, Viet Nam, Iraq, the United Arab Emirates and Kazakhstan, among others, imports by China are forecast to be static as consumer concerns over H7N9 have weighed on demand. In Japan and the Republic of Korea, abundant domestic supplies have reduced demand for imports.

In Europe, deliveries to the Russian Federation are expected to fall by three per cent. Imports by the Federation remain at less than half of what they were in the mid-2000s because of a considerable increase in domestic production. Likewise, rising poultry production in the European Union is forecast to prompt a drop of five per cent in imports.

In the Americas, Mexico is anticipated to decrease its imports, while those of Canada may rise slightly.

Figure 3. Pork and poultry meat producers benefit from reduced feed costs

The four leading exporters - Brazil, the United States, the EU and China - which together account for almost three-quarters of global trade, have seen little expansion in sales in recent years. Instead, most growth has come from second-tier exporters, including Argentina, Turkey, Ukraine, Belarus, Iran and the Republic of Korea.

Of the big four, the United States is expected to see sales remain unchanged while the others are anticipated see a fall in trade.

In the second grouping of countries, some should maintain growth, for example Argentina, Turkey and Ukraine, while the others are anticipated to see either no increase or a decline, as a result of stagnant or falling import demand from their principal markets.

Exports from Turkey, which may be up a much as 20 per cent for the year, have benefited from rising regional demand, especially from Iraq and Syria. Exports by Argentina have risen steadily in recent years, underpinned by demand from Venezuela. Over the past five years, exports from the Ukraine have also increased substantially, directed mainly to its immediate neighbours and the Near East.

November 2013