|No. 2||Rome, June 2004|
Meat and Meat Products
International meat prices are surging in 2004, as animal disease outbreaks in major meat exporting countries and bans on imports from disease afflicted areas are reducing exportable supplies. Expectations of higher international prices for meat came of the heels of rising prices in the previous year. In 2003, the FAO trade-weighted meat price index rose already by 16 percent, as limited meat production gains lifted prices by 42 percent for poultry, 19 percent for beef and 8 percent for pigmeat.
Animal diseases, rising feed prices and considerable uncertainty about consumer demand for meat products are slowing the expansion in global meat output in 2004. Production is expected to rise by 1 percent to 253.6 million tonnes, one of the slowest growths registered in FAO’s database. Meat markets have been disrupted by the impact of the avian influenza (AI) which led to increased poultry mortality/culling throughout Asia and parts of North America, and the finding of Bovine Spongiform Encephalopathy (BSE) in North America. In Asia, meat output is expected to increase less than 2 percent, half the average rate of the past five years. Output gains in developed countries are expected to remain stable with a slight increase in North America offset by a decline in Europe. At the world level, per caput meat consumption is expected to remain at 39.9 kg/caput, constrained by high overall meat prices and consumer concerns about the safety of eating poultry, particularly in Asia.
Import bans on meat produced in disease-afflicted countries in early 2004 affected approximately one-third of global meat exports, or 6 million tonnes. While the bans have been temporary, global meat trade, originally forecast to rise in 2004, is now anticipated to slide by 4 percent to 18.4 million tonnes. If confirmed, this would be the first drop in meat trade since the mid-1980s. Over the past four years, alternating disease outbreaks and recoveries have resulted in rapid shortages/increases in exportable meat supplies and considerable international meat price variability. The resulting shift in trading patterns is expected to favour those disease-free meat suppliers in Latin America and Oceania. Exports from Oceania, however, are likely to be constrained in 2004 by low animal inventories and stronger currencies in the region. By contrast, meat exports from South America, which have surged over the past three years, might increase further by about 6 percent in 2004, taking the region’s share of meat exports to 27 percent, up from just 16 percent in the early 1990’s. Moving into the position as the world’s largest meat exporter, Brazil is expected to ship over 3.8 million tonnes of meat in 2004, or 21 percent of global trade.
Global bovine meat production is forecast to reach 61.9 million tonnes in 2004, up marginally from the previous year. Low cattle inventories in Oceania, BSE concerns in North America and reduced sector support in the EU are constraining slaughtering, leading to an expected 2 percent drop in bovine meat production in developed countries. By contrast, output in developing regions is anticipated to rise by 3 percent, with continued strong gains foreseen in China, India, the Republic of Korea and Mexico. Per caput beef consumption is set to drop by 1 percent in both developed and developing regions to 22.7 and 6.4 kg/caput, respectively.
Higher prices and import bans on products originating from North America are expected to reduce global beef trade by 8 percent to 5.6 million tonnes. North American exports, totalling 1.5 million tonnes in 2003 and valued at US$4 billion, are expected to plummet by 50 percent. While exports from Canada will recover as the United States lifts import restrictions on Canadian products, United States exports are estimated to decline by 82 percent. As demand for beef from disease-free suppliers surges, shipments from South America might expand by 17 percent, with Brazil’s share of global beef shipments rising to 22 percent. However, the gap left by beef trade restrictions on North American products is unlikely to be entirely filled by South American or Oceania. Consequently, purchases by the major importing countries of Japan, Mexico, and the Republic of Korea are projected to fall by 35 percent, 30 percent, and 40 percent respectively. While Indian beef exports are likely to rise by 14 percent, a marginal decline in Australian shipments is anticipated, on account of limited inventories and an appreciating currency. The EU is set to register their second year as a net beef importer as exports decline for the fifth consecutive year.
World Meat Statistics 1/
Source: FAO Note: Total computed from unrounded data.
1/ For more detailed meat statistics, go to the following web site: http:/www.fao.org/es/ESC/en/20953/21014/index.html
2/ Includes meat (fresh, chilled, frozen prepared and canned) in carcass weight equivalent; excludes live animals, offals and EU (15) intra-trade.
Rising feed prices, AI induced bird mortality and slaughter, combined with consumer responses to the spread of AI is leading to a second year of slow growth in poultry meat output. Production in 2004 is forecast at 77.1 million tonnes, implying an increase of just 1 percent from the previous year, well below the average 5 percent growth of the past five years. Beset by AI outbreaks in early 2004, Asian poultry output is set to drop by 2 percent as disease-afflicted countries, i.e. Thailand, Viet Nam, Japan, the Republic of Korea, and Indonesia, among others, are estimated to have culled over 100 million birds. Recovery in many of these Asian countries, including those not affected by the disease, is constrained by lower prices in the wake of shaken consumer confidence in poultry and rising feed costs. Per caput consumption in the developing countries is forecast to decrease slightly to 8.2 kg/caput, mostly due to an estimated 2-percent decline in Asia. At the global level, per caput consumption, which grew 3 percent annually over the past five years, is expected to remain stable at 12 kg/caput.
Import bans on products originating from the 12 Asian and North American countries that were affected early in 2004 by AI are reducing supplies in world markets and causing international prices to rise. As a result, global trade in poultry products in 2004 is anticipated to contract by 4 percent to 7.6 million tonnes. Led by lower exports from the United States, developed country exports are expected to witness a third year of consecutive decline, sliding 5 percent to an estimated 3.8 million tonnes. Disease outbreaks are restricting Asian poultry exports, supplied by mainly Thailand and China, with shipments from the region forecast to be down by 21 percent. Non-traditional exporters in Asia, such as India, Malaysia, and the Philippines are increasing their exports while exports from Brazil, which have registered double-digit gains over the past 7 years, are expected to rise by a further 10 percent. High prices and consumer concerns are expected to reduce imports by major importers in Asia while trade barriers in the Russian Federation, will cause a further contraction in their imports.
Low returns to hog producers in the context of higher feed prices are expected to limit growth in global pigmeat production to less than 2 percent in 2004, taking output to 97.7 million tonnes. In many countries, production costs are exceeding market prices as international maize and soybean meal prices have soared 20 percent and 65 percent respectively compared with last year. Lower profitability facing many of the producers in Europe and Brazil, combined with reduced prospects for exports to the Russian Federation, are negatively affecting the production outlook. Developed countries are set to experience a slight decline in output. This is despite, in the United States, a projected rise in output by 3 percent supported by strong consumer demand. In Asia, which accounts for 56 percent of global output, and where AI has bolstered pigmeat prices, output is set to increase by 3 percent. While per caput consumption is moving up in Asia and developing countries by 2 percent in 2004 to nearly 15 kg/caput and 11.8 kg/caput respectively, it remains significantly below the level of 29.2 kg/caput in developed countries.
Trade prospects for pigmeat in 2004 are stronger than for poultry and bovine meats, with exports estimated at 4.3 million tonnes, or 2 percent higher than last year. Much of the increase is expected to be sourced in North America, which typically exports high valued cuts to lucrative Asian markets. Shipments by other traditional exporters are expected to be hampered by trade restrictions in the Russian Federation, which was the world’s largest meat importer until its imposition of tariff rate quotas in 2003. Limited access to the Russian Federation market, where imports are forecast to be down by 12 percent, is set to reduce Brazilian shipments by 40 percent while the elimination of EU export subsidies early this year is forecast to reduce EU exports by 4 percent. By contrast, shipments from Mexico and Chile are anticipated to rise as a result of a trade agreement with Japan where strong consumer demand is bringing about an estimated 12 percent rise in imports, to a new record level. This is despite expectations that the strong import pace might retrigger the pigmeat safeguard, leading to higher tariffs in August.
Global ovine meat production is expected to increase by 3 percent in 2004 to 12.4 million tonnes. Growth in Asia, which accounts for more than half of global production, is expected to rise 4 percent, supported by rising output in China. Despite a steady decline in United States output, growth in developed countries should be supported by a recovery of production in Australia, the EU and New Zealand. Global per caput consumption is forecast up 2 percent to 2 kg/caput.
A recovery in drought-affected exportable supplies from Australia and strong supply availability in New Zealand is leading to an estimated 3 percent increase in trade to 696 000 tonnes. Shipments from Oceania, which comprise 90 percent of global exports, are stimulated by higher import demand from the EU, North America, and Mexico.