Global meat production in 1997 is expected to grow by 4 percent to some 227 million tons, stimulated by dynamic global demand coupled with much reduced prices for feed grains which should more than offset a strengthening in prices of protein meals. The generally improved feed situation since mid-1996 should spur growth of the poultry and pig sectors. Meats predominantly produced by grass-based systems, especially bovine meat, are expected to lose further ground in terms of their share in overall meat production.
Globally, per caput meat availability is estimated at an average 38.5 kg in 1997, almost three percent more than last year. The increase should be supported by widespread economic growth and a high propensity for expenditure on meat in the developing countries, where consumption levels are still relatively low. Per caput meat intake is estimated to grow by 6 percent this year to 27.8 kg for this group of countries, while it is anticipated to stagnate around 76.5 kg in the developed countries, largely due to a further drop in consumption in the CIS which has offset some growth in the EC and Australia. Consumption of meat in Japan may decline for the first time during the last two decades, reflecting consumer fears over meat safety. Meat consumption patterns this year are likely to shift further towards poultry meat, confirming a long-term tendency. This trend should be reinforced this year by a decline in the prices of poultry, especially relative to pork.
WORLD MEAT PRODUCTION
| 1995 | 1996 | 1997 | |
| ( . . . . million tons . . . . ) | |||
| WORLD TOTAL | 209.5 | 217.3 | 227.2 |
| Poultry meat | 55.5 | 58.4 | 62.6 |
| Pig meat | 83.2 | 86.9 | 91.4 |
| Bovine meat | 56.2 | 56.9 | 57.6 |
| Sheep meat and | |||
| goat meat | 10.7 | 11.1 | 11.5 |
| Other meat | 3.9 | 4.0 | 4.1 |
| DEVELOPING | |||
| COUNTRIES | 108.8 | 116.9 | 126.0 |
| Poultry meat | 27.4 | 29.6 | 32.6 |
| Pig meat | 47.2 | 51.4 | 55.9 |
| Bovine meat | 24.8 | 25.9 | 27.0 |
| Sheep meat and | |||
| goat meat | 7.1 | 7.6 | 8.0 |
| Other meat | 2.3 | 2.4 | 2.5 |
| DEVELOPED | |||
| COUNTRIES | 100.6 | 100.5 | 101.2 |
| Poultry meat | 28.0 | 28.9 | 30.0 |
| Pig meat | 36.0 | 35.5 | 35.4 |
| Bovine meat | 31.4 | 31.0 | 30.6 |
| Sheep meat and | |||
| goat meat | 3.6 | 3.5 | 3.5 |
| Other meat | 1.5 | 1.6 | 1.6 |
International trade in meat (excluding trade in live animals and trade in meat within the European Community and within the CIS) is provisionally put at 13.9 million tons (in carcass weight equivalent), up 4 percent compared to 1996. Among the various meat categories, trade in poultry meat is expected to expand fastest, reinforcing its lead position gained in 1996, when poultry meat surpassed trade in bovine meat, volume-wise.
WORLD MEAT EXPORTS 1/
| 1995 | 1996 |
1997
estim. |
|
| ( . . . thousand tons . . . ) | |||
| WORLD | 12 351 | 12 375 | 13 925 |
| Poultry meat | 4 529 | 5 270 | 5 606 |
| Pig meat | 2 209 | 2 466 | 2 429 |
| Bovine meat | 4 704 | 4 733 | 4 955 |
| Sheep meat and | |||
| goat meat | 663 | 661 | 690 |
| Other meat | 246 | 246 | 246 |
Global export availabilities should remain ample for poultry and bovine meat in 1997. By contrast, export supplies are expected to be tight for pork and sheep meat. Meat import demand is, however, anticipated
to remain strong, with the possible exception of Japan where consumer confidence in meat, especially imported meat, has been substantially eroded in 1996 by the E-Coli poisoning, concerns over BSE and, more recently, by the foot-and-mouth incidence among pig herds in the Chinese Province of Taiwan. Imports by the CIS countries, a major force driving trade since 1993, are expected to increase again this year.
International prices for meat products, expressed in U.S. dollars, are forecast to follow divergent directions in 1997. Large poultry meat export availabilities, fostered by the reduction in international feed costs, should put prices of poultry meat products under downward pressure. By contrast, international pork prices are expected to strengthen despite lower feed costs, reflecting reduced pig meat supplies in major exporting countries following recent disease problems. World prices for bovine meat are also expected to rise compared with the 1996 depressed levels. However, the recovery should be only modest and prices are unlikely to be restored to the pre-scare levels due to lingering fears over beef consumption safety. Finally, relatively short export availabilities of sheep meat are anticipated to lift prices of both lamb and mutton, for the fourth consecutive year.
INTERNATIONAL MEAT PRICES
| 1995 | 1996 | 1997 | |
| ( . . . . . U.S.$/ton . . . . . ) | |||
| Chicken parts 1/ | 922 | 978 | 889 5/ |
| Fresh, frozen pork 1/ |
2 470 |
2 733 |
2 910 5/ |
|
Manufacture
cow beef 2/ |
1 947 | 1 741 |
1 906 6/ |
| Frozen mutton 3/ | 1 371 | 1 457 | 1 490 7/ |
|
Lamb frozen whole
carcass 4/ |
2 621 |
3 295 |
3 472 6/ |
Poultry Meat
Global poultry meat production is forecast to rise by 7 percent to 63 million tons in 1997, with growth expected in all regions except the CIS. Notable production gains are anticipated in all major producing countries, i.e. the United States, the EC, Brazil and China, but also in India, Indonesia, The Islamic Republic of Iran, Pakistan, The Philippines and Saudi Arabia. By contrast, a contraction is again anticipated in the CIS, where the sector continues to be hindered by inefficient production and marketing and strong import competition. Output in Japan is expected to decline slightly, following unfavourable producer returns in 1996.
Poultry meat became the most important meat category in international trade in 1996, after a very strong expansion since 1994, when the Russian Federation emerged as a major importer. In 1997, global trade in poultry meat is expected to expand by 6 percent, to 5.6 million tons, more than twice the quantity traded in 1993. After several years of spectacular growth, shipments to the CIS (mainly the Russian Federation) are forecast to rise more moderately this year. By contrast, China is expected to import more, in particular minor poultry cuts. Poultry imports by Japan are anticipated to be boosted by high prices for pork and continued health concerns over beef. Substantially larger purchases are also likely to be made by South Africa and Mexico, in response to dynamic domestic demand. Despite the liberalization of poultry trade in the Republic of Korea in July 1997, imports are not expected to increase beyond the relatively high level reached in the previous year. The Czech Republic and Poland are forecast to buy more this year, despite an anticipated recovery in production and generally high import duties. By contrast, imports by countries in the Near East are likely to contract, mainly reflecting reduced purchases by Saudi Arabia following sizable production increases.
Exports from the United States are anticipated to reach a new record, accounting for half the global trade volume. Very competitive pricing and the removal of a value-added tax on exports of primary and semi-processed commodities should help Brazil in making further inroads in other exporters’ traditional markets, while sales by Hungary are likely to be boosted by increasing subsidies on exports to the CIS. China’s shipments of high value-added poultry products are also anticipated to increase, as the country maintains the strategy of exporting expensive cuts and importing very cheap poultry parts. By contrast, high domestic demand in Thailand is anticipated to depress the country’s sales abroad. As regards the EC, the Uruguay Agreement (URA) commitments for reduced subsidized exports coupled with comparatively high domestic grain prices, which should hinder the poultry sector’s ability to compete internationally without refunds, may contribute to an expected 4 percent reduction in poultry sales to third markets this year.
Despite the relatively strong import demand, international prices for poultry meat are forecast to decline from the relatively high level of 1996, reflecting generally reduced feed costs combined with intense competition among exporters. Exports of chicken parts from the United States, have averaged U.S.$ 889 per ton during the first five months of 1997, 5 percent less than during the same period last year and 9 percent less than the 1996 average.
Pig Meat
As in the case of poultry, the more favourable feed situation has improved prospects for returns in the pig meat sector since mid 1996 and production increases are anticipated in most regions. As a result, global pig meat output is forecast to grow by 5 percent to 91 million tons. In the Far East, the world’s largest producer, China, is expected to reach a new record in 1997, reflecting increasing earnings for producers since May last year, with the pig-to-maize price ratio increasing steadily. Most other countries in the region are likely to record positive growth, with the exception of: the Chinese Province of Taiwan, where an outbreak of the highly contagious foot-and-mouth disease among pig herds has led to massive cull to control the disease; the Republic of Korea, following a contraction of the breeding herd last year; and the Democratic People’s Republic of Korea, due to continuous acute shortages of feedstuffs. In Latin America and the Caribbean, prospects for pig meat production point to an increase in Argentina, Brazil, Chile and Venezuela, again reflecting the more favourable feed situation and sustained demand, while output may decline in Mexico, following the closure of many pig farms in 1996. Among the developed countries, negligible increases in production are expected in the United States and Canada. A planned expansion in the EC will be tempered by the occurrence of swine fever in Belgium, Germany, the Netherlands and Spain, which has led to the introduction of massive slaughter programmes. In eastern and central Europe, pig meat output should decline this year in Hungary, Poland and Romania, reflecting breeding herd liquidation in 1996. A substantial contraction is again forecast in the CIS, with a 15 percent cut in pig numbers reported in the Russian Federation in May 1997 compared to May 1996. A continued fall in production in Japan is also anticipated, as the restructuring of the sector proceeds.
In March 1997, the international pig meat market was shaken by the announcement of an outbreak of foot-and-mouth disease in the Chinese Province of Taiwan, a major supplier of the Japanese market, which led to an immediate export ban from the Province. The occurrence of this disease coincided with a situation of relatively tight supplies in other major exporting countries and immediately resulted in dramatic increases in export prices, despite lower feed prices. Nonetheless, early forecasts for global trade in pig meat are for a relatively stable volume at around 2.4 million tons in 1997. On the import side, increased purchases are anticipated to be made by Mexico, Hong Kong and the Republic of Korea. High domestic prices in the latter have induced the government to authorize imports above the URA minimum access quota. Moreover, further imports may become necessary if the country is to take advantage of the withdrawal of the Chinese Province of Taiwan from the Japanese market to step up its sales there. By contrast, reduced purchases are likely to be made by Japan, where high minimum import, or "gate", prices prevailed until the end of June, under the URA safeguard measures. In July, the gate prices were cut by 24 percent, which should help to revitalize imports, especially of lower priced frozen pork. However, overall calendar year deliveries may still be below those of 1996 in the light of consumers’ health concerns over meat consumption, even though foot-and-mouth disease is not transmissible to humans. Imports by the CIS are also set to decline, mainly as a result of reduced purchases from the EC, following the elimination of EC export refunds on pig carcasses and cuts last May and high international prices.
Following the outbreak of foot-and-mouth disease, pig meat exports by the Chinese Province of Taiwan are anticipated to plummet, all of which were geared to the Japanese market. This could give an additional boost to sales from the United States, a net pig meat exporter since 1995, but also from the Republic of Korea. Larger exports are also forecast to be made by Canada and Brazil. By contrast, those by Poland are anticipated to fall by two thirds, following the sharp contraction in output, while the EC’s exports will be curbed this year by relatively short domestic supplies.
The tight supply situation in major exporting countries is anticipated to maintain the upward pressure on international prices for pig meat. The export unit value for frozen pork from the United States, for instance, averaged U.S.$ 2 910 per ton during January-May 1997, 4 percent above the level of the same period of 1996. Further upward pressure on prices is likely to prevail during the rest of the year, especially during the latest part of the year, following the reduction in pork "gate" prices in Japan which should give a boost to import demand.
Bovine Meat
Bovine meat production in 1997 is forecast to grow by 1 percent to 58 million tons. As in the previous years, the developing countries should provide all the momentum with expansion there expected to reach 4 percent, which would more than offset a one percent reduction in the developed countries. In the Far East, China is foreseen to record a dynamic production growth, much of which will be sustained, as in the previous years, through improved breeding and feeding. In Indonesia and the Philippines, large imports of live animals for fattening over the recent years and lower feeding costs should support an expansion of the sector. Substantial increases are also anticipated in the Republic of Korea and Pakistan. In Latin America and the Caribbean, Argentina is anticipated to step up production. Investment in the sector and good pasture conditions should also boost output in Brazil and in Uruguay. By contrast, a contraction is anticipated in Mexico, reflecting reduced cattle inventories, following recurring drought problems, and retention for herd rebuilding. In Africa, output is anticipated to rise, with increases foreseen in Burkina Faso, Côte d’Ivoire, Mali, Morocco and Nigeria. Output should also expand in Egypt, where the restoration of the National Buffalo Project (NBP) by the government in 1993 has resulted in steadily expanding herds. By contrast, a decline is anticipated in Algeria and in Botswana, reflecting reduced animal inventories, coupled with cattle losses associated with the occurrence of foot-and-mouth disease in the former and of contagious pleuropneumonia in the latter. In the developed countries, the overall tendency is for a contraction or no growth. In particular, the EC is expected to record a 1 percent decline, following the elimination in 1996 of over 2 million head of cattle in the wake of the BSE crisis. In the CIS, a further sharp production fall is likely as the large-scale farms, which have the largest share of the cattle population, continue to scale down their operations in the light of logistic and financial problems. In eastern and central Europe, production is expected to continue on a downward trend in most countries, as cattle herds have contracted further. A new decline is also anticipated in Japan. By contrast, increases are forecast in Canada, New Zealand and Australia. Production in the United States is forecast to stabilize slightly below the record level of last year, with higher average carcass weights compensating for a sharp decline in slaughtering.
International trade in bovine meat is put at close to 5 million tons, up 5 percent on 1996, as the market continues to recover from the shock caused by the BSE scare last year. Purchases by the United States, mainly of manufacturing grade beef, are forecast to rise, as higher domestic prices compared with 1996 should stimulate exporters that benefit from preferential access to its market (mainly Australia and New Zealand) to fill their export entitlements. Imports are also anticipated to grow in Mexico and in Chile. In the Far East, the Republic of Korea is expected to step up its purchases in compliance with its URA commitments. Larger imports are also forecast to be made by the Philippines, Hong Kong and the Chinese Province of Taiwan, spurred by rising domestic demand. Deliveries to the CIS are forecast to increase although the expansion may be contained by higher prices following reductions in export refunds since January by the EC, the major supplier to the CIS. In Europe, modest increases in imports by Poland, Romania and the EC are anticipated. Purchases by Japan, the world’s largest beef importer, are anticipated to stagnate despite the lowering of import duties to 44.3 percent in April, reflecting an erosion of consumers’ confidence. Imports by Brazil, Canada and Egypt are forecast to contract, reflecting progress made in production.
On average, international bovine meat prices in 1997 are expected to be above the sharply reduced level in 1996, a year characterized by record supplies and depressed demand, following the BSE scare. Export prices of Australian manufacturing beef to the United States market, for instance, have averaged U.S.$ 1 906 per ton in January-July 1997, 11 percent more than the level recorded in the first seven months of 1996. However, on a yearly basis, the final rise is likely to be more contained, especially after consumer fears have been revived by various incidents, including the illegal sale of beef from the UK, to other EC and third country markets and, in the United States, the withdrawal from the market of large quantities of beef hamburgers following an infection of E-Coli bacteria.
Sheep Meat
Global sheep meat production is forecast to reach 11.5 million tons in 1997, 4 percent more than last year. China should provide the main momentum, with a double digit rise in output. Buoyant domestic demand should boost production in Bangladesh, Pakistan, India and the Philippines. In Africa, growth, at 5 percent, should rebound, with specially large gains expected in Morocco, following flock rebuilding in 1996, and in Nigeria. In Latin America and the Caribbean, output is forecast to increase in Mexico and, in particular, Peru but it may stagnate in Uruguay where resources are being shifted to cattle raising. Most developed countries are forecast to cut output, including Bulgaria, the CIS, Poland, the United States and, in particular, the two major sheep meat exporters, i.e. Australia and New Zealand. Production in the EC is forecast to remain unchanged, confirming the high stability which has characterized the sector since the introduction of ceilings on ewes headage payments in 1993.
In 1997, international trade in sheep meat is put at around 710 000 tons, 3 to 4 percent more than last year. Imports by the EC, which are mainly limited to deliveries entering under preferential access quotas, are forecast to rise slightly. Among countries in the Near East, lower purchases are likely to be made by Saudi Arabia, following a decision by the government to halt the flow of carcasses from the United Arab Emirates. Little change in the imports by other countries in the sub-region is anticipated. Foreign purchases by Canada and the United States may increase, reflecting short domestic supply and high internal prices. Larger imports are also anticipated to be made by Papua New Guinea.
The relatively short export supplies should support a strengthening in international sheep meat prices, especially for lamb. Mutton prices are also likely to be under upward pressure. During the first seven months of 1997, frozen lamb carcasses exported from New Zealand to the EC were priced at U.S.$ 3 472 per ton, 14 percent more than over the same period in 1996. Mutton prices have also shown a tendency to increase in markets in the Near East, with frozen mutton in the United Arab Emirates quoted at U.S.$ 1 490 in January-August 1997, 4 percent above the corresponding period in the previous year.
