FAO Food Outlook: Meat and Meat Products
Global meat markets are challenged by high feed prices, stagnating consumption, and falling profitability, with growth in total output slowing down to two per cent, according to the FAO Food Outlook report for November 2012. With international prices close to record highs, growth in world trade is also decelerating.Meat and Meat Products: Market Summary
Struggling with high feed prices and stagnating consumption, global meat production in 2012 is forecast to grow by less than two per cent to 302 million tonnes. As falling industry profitability has translated into modest output gains in the developed countries, most of the world expansion is likely to take place in the developing countries, which now account for 60 per cent of world output. Virtually all of the sector growth in 2012 is forecast to stem from the feed-dependent poultry and pig meat sectors, as gains in both bovine and sheep meat outputs are anticipated to be modest.
Concerns about the profitability of the meat
sector have been compounded by a weakening of
the growth of export markets, with trade expansion
anticipated to slow down to two per cent from eight per cent
in 2011. Global meat exports are expected to edge
up by about 600 000 tonnes to 29.4 million tonnes in
2012, mainly sustained by increased poultry and pig
meat flows and with much of the market expansion
likely to be captured by developing countries, in
particular Brazil and India.
Escalating feed prices and slowing meat
production growth have pushed up international
meat prices in late 2012, to levels approaching the
highs attained in 2011. Accordingly, the FAO meat
price index, which has jumped by five per cent since
July 2012, averaged 174 points between January
and October, which compares with 176 for the same
period last year. Most of the recent increase in the
meat price index reflect price gains for poultry and
pig meat, which have soared by nine per cent and 12
per cent, respectively, since July.
(2002-2004 = 100)
Poultry Meat
Poultry production growth weakens in the face of high feed prices and falling profitability
High feed prices and stalling consumption growth are
anticipated to weaken world poultry meat production
growth to two per cent in 2012, from 3.4 per cent last year,
reflecting a loss of momentum in both developing and
developed countries. Global production is now forecast to
rise by 2.2 million tonnes to 104.5 million metric tonnes,
with two-thirds of the increase originating in Asia.
While chicken prices remains competitive and preferred
by price-sensitive customers, difficulties in passing off
higher feed costs have resulted in negative profit margins
for the sector and lower year-to-year chick placements
in the United States and Brazil, a situation expected to
result in falling production in the two countries this year.
Prospects are more positive in the EU and the Russian
Federation with output expanding to meet firm domestic
demands. Increased investment and a consumer shift from
pork to poultry is underpinning an expansion of output
in China.
Production gains are also foreseen this year in
India, Indonesia, Japan, Malaysia and Thailand, with
oversupplies reported to be pressuring down prices and
profitability in several of them. While 12 countries
have registered outbreaks of avian influenza in 2012,
persistent occurrences have curbed output in Viet Nam
for the third successive year. This contrasts with Mexico
where a mid-year outbreak of H7N1 affected production
of eggs rather than broilers. Unlike in Brazil, the sector
is expected to grow vigorously in Argentina, which has
moved into position as the world's fifth largest poultry
producer, reflecting past years government supported
investment and competitive feed prices. In Saudi Arabia,
subsidies on imported animal feed are supporting
the expansion of poultry output, which would lift the
country's rate of self-sufficiency since last year from 38
per cent to 46 per cent.
Poultry trade growth slows as global import demand stalls
With adequate supplies in many Asian markets translating
into lower regional import demand, global poultry trade is
anticipated to rise by only 2.4 per cent to 13 million tonnes
in 2012. This would imply a severe loss of momentum
compared with 2010 and 2011, when trade in poultry
products rose by 6.7 per cent and 8.8 per cent, respectively.
Early year production expansion in Japan, the Republic
of Korea and the Philippines are limiting imports into
the region, despite larger shipments to Singapore and
Viet Nam. Deliveries to the Russian Federation in 2012 are
expected to rebound after four years of contraction, more
as a result of a custom agreement with Ukraine and Belarus
than by the recent accession of the country to the WTO.
Contrasting with the other regions, import growth for Africa
as a whole is expected to remain sustained at around 12
per cent in 2012. This tendency reflects the positive effects of
income growth in several African countries, such as Angola,
Benin, Ghana and the Republic of the Congo, which are
translating into strong domestic demand and double digit
import gains. Even deliveries to South Africa are moving
up despite this year's imposition of anti-dumping duties on
Brazilian shipments - a decision which Brazil is disputing at
the WTO. Imports by Egypt are also anticipated to surge
to record levels, following outbreaks of avian influenza,
combined with FMD-induced high beef prices. By contrast,
meat imports by the Islamic Republic of Iran, including
poultry, which is increasingly supplied by neighbouring
Turkey, have been stricken by the impact of sanctions.
Low margins and declining output are expected to
result in only a modest expansion of poultry exports by the
United States and Brazil, which together supply two thirds
of global trade. Meanwhile, shipments from Thailand to
the EU are forecast to rise vigorously, due to competitive
pricing and the EU lifting of an eight-year AI-induced ban
on fresh/chilled product. Likewise, exports from Turkey,
which have benefited for the last several years from a rising
regional demand, especially from Iraq, are forecast to grow
by over 20 per cent. Government investments are supporting
record Argentine exports, particularly to regional markets,
including Venezuela and Chile.
Further ReadingYou can view the full report by clicking here. |
November 2012