International Egg and Poultry Review
US - By the USDA's Agricultural Marketing Service - This is a weekly report looking at international developments concerning the poultry industry, this week looking at the Poultry Markets in 2003 and Meat Prospects in 2004.
Growth in the poultry sector stalls, prices stumble
Poultry markets in 2003 are characterized by the slowest output growth
in over 30 years because of low prices, disease and weather problems,
increased non-tariff trade barriers among importing countries
and heightened competition among exporting countries.
Lower poultry
meat prices going into 2003 have translated into world production of
75.2 million tons in 2003 with output gains of less than 2 percent, only
one-half the level during the period from 1995 to 2002. While poultry
output in the U.S., the largest poultry exporter, is up marginally, adverse
weather in the EU combined with disease-related losses in the Netherlands
are estimated to have led to a decline in EU production of
nearly 4 percent.
Meanwhile, developing country output gains, at 3 percent,
are expanding by less than one-half the level in 2002. Factors
affecting this slower growth include reduced profitability in South
America, where feed costs increased in the first half of the year, and the
impact of SARS in Asia, which had a dampening effect on poultry consumption
and prices.
However, a recovery in Asian poultry consumption
and prices has been prompting late-year output gains in Thailand
and China, the region’s largest producers and exporters. In India, which
is now exporting frozen whole birds to the Middle East, higher product
prices and continued investment in industry capacity and productivity
are expected to support output gains of 14 percent.
World Meat Exports, thousand tons 1/ | |||
2002 | 2003 forecast | 2004 prelim | |
World | 18,773 | 18,930 | 19,578 |
Poultry meat | 7,870 | 7,871 | 8,104 |
Pig meat | 4,061 | 4,079 | 4,122 |
Bovine meat | 5,876 | 5,991 | 6,338 |
Sheep meat and goat meat | 721 | 700 | 723 |
Other meat | 283 | 289 | 289 |
Note: Total computed from unrounded data. 1/ Includes meat (fresh, chilled, frozen prepared and canned) in carcass weight equivalent; excludes live animals, offals and EU intra-trade. |
The imposition of country-specific quotas in the Russian Federation, the outbreak of SARS and subsequent economic impact in Asia, and market closures due to the outbreak of Avian Flu in numerous countries are leading to the second year of sluggish growth in the global poultry market.
Poultry trade has been estimated at 7.9 million tons for 2003, which means that the level has remained unchanged since 2002, a considerable reversal from the past five years when 7 percent annual poultry gains considerably surpassed those of other meats.
Sluggish consumer demand is lowering imports by China, Japan and the Republic of Korea; market access to China has further been complicated by administrative problems in obtaining import permits.
The imposition of poultry quotas in the Russian Federation, the world’s largest poultry importer (nearly 60 percent of consumption is import-derived), is leading to an estimated 20 percent drop in imports and reports of domestic prices rising by 28–90 percent, depending on the cut, during the April– September period.
In Europe, where prices are rising in the context of decreasing supplies, imports are expected to be up despite the closure of a tariff loophole in August which should slow the pace of year-end imports.
Limited export supply availability in developed countries, particularly in the United States and Europe, is eroding their already declining share of global exports, estimated at 47 percent in 2003, down from 64 percent in 1999.
Meanwhile, relatively low production costs in Brazil and a favorable currency are prompting 8 percent trade gains there, while their Asian rival, Thailand, continues to expand exports of processed poultry products to Japan and the EU.
World Meat Production, million tons | |||
2002 | 2003 est. | 2004 prelim | |
World Total | 245.9 | 249.1 | 253.1 |
Poultry meat | 73.8 | 75.2 | 77.3 |
Pig meat | 94.3 | 95.8 | 97.3 |
Bovine meat | 61.6 | 61.9 | 62.1 |
Sheep & goat meat | 11.6 | 11.7 | 11.9 |
Other meat | 4.5 | 4.5 | 4.6 |
Developing Countries | 138.2 | 141.5 | 145.0 |
Poultry meat | 39.5 | 40.6 | 42.0 |
Pig meat | 56.3 | 57.5 | 58.6 |
Bovine meat | 31.2 | 32.1 | 32.8 |
Sheep & goat meat | 8.3 | 8.5 | 8.6 |
Other meat | 2.9 | 2.9 | 2.9 |
Developed Countries | 107.6 | 107.5 | 108.1 |
Poultry meat | 34.3 | 34.5 | 35.2 |
Pig meat | 38.0 | 38.3 | 38.7 |
Bovine meat | 30.4 | 29.8 | 29.3 |
Sheep & goat meat | 3.3 | 3.2 | 3.2 |
Other meat | 1.6 | 1.7 | 1.7 |
Note: Total computed from unrounded data. |
Meat Prospects in 2004
Continued short-term price recovery will likely prompt a slight rebound
in production in 2004, with global meat output anticipated to increase 2
percent to 253.1 million tonnes.
The low supply growth that characterized
the poultry and pigmeat markets in 2003 is projected to abate as
stronger economic prospects in both developed and developing countries
strengthen demand for meat.
However, the anticipated growth in
pigmeat and poultry output will not be matched in the beef sector as
herd rebuilding starts in the United States and Oceania. The tighter
supplies typically associated with herd rebuilding are anticipated to
limit their export potential; growth in beef supply availabilities is expected
to come from developing countries.
The influence of trade-restricting measures in Japan and Russia, two
of the major meat importing countries, will persist in 2004 because it is
anticipated that both countries will maintain restrictive tariffs and TRQs.
However, overall meat trade is expected to grow 3 percent, supported
by strong import demand from the U.S. as its meat supplies decline
and a rising Asian demand for pigmeat and poultry, particularly in China.
Continued tightened supplies of beef, combined with a recovery in
trade, are likely to maintain upward pressure on beef prices in 2004.
Some stabilization is expected for pigmeat and poultry meat in the
context of higher production.
Source:FAO
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Source: USDA's Agricultural Marketing Service - 9th December 2003.