|No. 4||Rome, December 2004|
Meat and Meat Products
The FAO trade-weighted meat price index rose in mid-2004 to an eight-year high as market closures due to animal disease and food safety concerns pushed up yearly average international poultry and beef prices by 24 percent and 12 percent respectively. However, the index has stabilized in recent weeks as import bans on products from previously disease afflicted areas have been lifted and exportable supplies have subsequently increased.
Global meat output in 2004 is estimated by FAO at 258 million tonnes, 2 percent up from the previous year. Increased output of pigmeat is expected to account for most of the growth this year, this sector having been favoured by the limitations on poultry and beef production. By region, the strongest growth in meat output this year is expected in South America, where production is estimated to rise 5 percent, to reach 31 million tonnes. In Asia, which normally accounts for about 40 percent of global meat output, growth in 2004 is estimated at 2.4 percent, only half that of the previous year.
Higher prices for all meats during the year limited global meat consumption and per caput consumption is estimated to increase only marginally from 40.3 to 40.6 kg. The annual increase is estimated to be the same this year in the developed and in the developing countries but annual per caput consumption in the developing countries, estimated at 29.7 kg, remains only one-third of that in developed regions.
Towards the end of 2004, markets around the world gradually began reopening as the countries where trade restrictions were previously in place recovered their disease-free status or shifted to exporting types of meat, such as cooked products, which mitigate food safety concerns. However, the wide extent of market closures and food safety concerns among consumers during most of the year has led to an estimated 2 percent drop in global meat trade in 2004 to 19.1 million tonnes, the first decline since the mid-1980s. At the same time, the share of trade among exporters has changed significantly. The share of exports from the developed countries is seen to fall by 3 percent to 58 percent, while that of South America, the biggest exporter among the developing countries, is forecast to rise from 23 to 28 percent.
Despite a drop in developed country beef output to the lowest level since the early 1970s, global beef production in 2004 is expected to reach 62.2 million tonnes, up 1.5 percent from the previous year. In developed countries, lower cattle inventories have led to a second consecutive yearly decline in slaughtering, reducing output by an estimated 2.4 percent. By contrast, in the developing countries output is estimated to have grown by 5 percent, supported by strong global demand for products from South America and India. As a result, the developing countries’ share of global output has expanded again in 2004, to reach 54 percent, 10 percent more than a decade ago. However, annual per caput consumption in the developing countries, estimated at 6.5 kg remains less than one-third of that of developed countries, which declined for the second consecutive year in 2004 to 23 kg.
Global beef trade is estimated to have declined by 6 percent in 2004, reflecting BSE-related import bans on North American beef exports and the prevailing high prices, which dampened import demand, especially in Asia. The developing countries’ share of world beef exports would be 48 percent, up sharply from 37 percent in 2003. Export-oriented industries in South America have benefited not only from the absence of the United States from the market but also the region’s improved disease status, favourable exchange rates and the ability to quickly shift product from the domestic to the export market. Growth in this region’s exports is estimated at nearly 30 percent in 2004, equal to the growth in the two preceding years. Among the developed countries, although Australia has maintained a high level of exports, the EU, previously a large competitor in international markets, remained a net importer for the second consecutive year.
Supported by higher prices and easing feed prices in the latter part of the year, global pigmeat output in 2004 is estimated up 2.4 percent, at just over 100 million tonnes. Food safety concerns about poultry and beef encouraged output growth of 4 percent in the developing countries, particularly in Asia, where shortages of alternative meats pushed up prices. These gains more than offset reduced output in some developed countries. Low hog inventories in Europe, combined with high feed costs and reduced profitability at the beginning of the year, led to an overall reduced output in the region in 2004. Although, developing countries accounted for over 60 percent of global pork production in 2004, up from 53 percent a decade ago; annual per caput consumption is estimated to remain at a low 12.3 kg compared to the average of 30 kg for the developed countries.
Limited export supplies of other meats favoured global pigmeat trade in 2004. Demand was strong in Asia, where imports for the year are estimated at 4.5 million tonnes, up 5 percent from the previous year. In Japan and the Republic of Korea, where beef imports typically supply 15 percent of total meat consumption, BSE-related bans on North American beef resulted in sharp increases in pigmeat imports by 17 and 32 percent respectively, despite the reactivation of the Japanese safeguard on pigmeat in August 2004. On the export side, shipments from the United States were supported by a favourable exchange rate, and are estimated up nearly 20 percent in 2004. In the EU, increased use of export restitutions during the year, combined with strong demand from the accession countries, led to increased exports. Bilateral trade agreements with Japan also offered increased trading opportunities for non-traditional exporters, such as Mexico and Chile. Strong Japanese demand was also particularly supportive to Chinese exports of heat-treated products.
Market disruptions due to avian influenza outbreaks, food safety concerns, and rising feed prices adversely affected poultry markets around the world in 2004. Global poultry output, estimated at 77.2 million tonnes, would be up only 1.6 percent, the slowest growth on record in the FAO database. Output growth in developing countries is estimated at less than 1 percent. High bird mortality, AI-induced culling, and high feed prices over the course of the year in many disease-affected areas in Asia, particularly in Thailand, Viet Nam, and Indonesia, have brought Asian production down by an estimated 3 percent. This compares to average annual gains of 5 percent over the past 5 years. By contrast, high poultry prices in international markets have induced strong production gains in South and North America, up 7 percent and 3 percent respectively. In the Russian Federation, restrictive tariff rate quotas, a 15-20 percent increase in domestic prices, and greater investment in production facilities supported an output expansion for the eighth consecutive year. Constrained supplies and high prices in global markets limited annual per caput poultry consumption during 2004, with the global average decreasing to 12.1 kg.
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.
Reduced supplies and restricted market access for products from disease-affected countries in 2004 led to an unprecedented 3.4 percent decline in global poultry trade, to 7.9 million tonnes. This decline was accompanied by a switch in suppliers, with exports from South America, which benefited from favourable exchange rates, rising sharply by 15 percent. The United States, despite stiff competition from Brazil, the AI outbreak in early 2004, and an estimated 10-percent decline in shipments, still maintained its position as the world’s largest exporter. Market shortages and high international poultry prices led to increased exports from countries such as the Philippines, Argentina, and Chile. In addition to growing trade diversion, the product composition of trade shifted slightly in 2004 with countries such as Thailand and China increasing their exports of cooked products to avoid trade bans on fresh/chilled meats.
World ovine meat production is estimated to increase 3 percent in 2004, driven by strong gains in developing countries, particularly in Asia, which accounts for nearly 60 percent of global output. High prices in China are being supported by a resumption of sheep exports to the Near East after an eight-year lull. In other areas of Asia, improved grazing conditions have supported herd rebuilding, with the exception of parts of Afghanistan where drought conditions have led to high animal mortality. Despite a continued structural decline in production in the United States, overall output in the developed countries, which accounts for one-quarter of world supplies, is estimated up 1.5 percent in 2004. Growth has been supported by increased slaughter and production in Australia reflecting improved pasture conditions, increased availability of heavy export lambs, and the loss of some live sheep markets in the Near East.
Stimulated by robust economic growth, diverse ethnic markets in developed countries and high prices for competing meats, global ovine meat trade is estimated to reach 747 000 tonnes in 2004, up 7 percent from the previous year. Declining output in the major import markets of the EU and the United States in the context of stable demand pushed up prices by about 15 to 17 percent in 2004. The resulting growth in import demand was additionally supported by rising imports by Papua New Guinea, China, and Taiwan Province of China. Strengthening international demand and high prices favoured exports from Oceania. This is despite lower output in New Zealand following one of the coldest winters in 30 years which induced higher lamb mortality rates and lower lambing percentages. While nearly 90 percent of global ovine trade is sourced from Oceania, China, Uruguay, and Argentina are all estimated to have increased exports in 2004.
The gradual reopening of previously restricted markets and the stabilization of consumption is expected to lead to a recovery in meat production and trade in 2005. Meat output is projected to increase in both developed and developing countries. Supplies of poultry and pigmeat are expected to expand as feed prices ease and animal disease concerns abate. By contrast, a rebuilding in cattle and sheep inventories in the major exporting areas may lead to another decline in beef and lamb output.
As a result of the forecast recovery in meat production, prices are expected to stabilize at lower levels in 2005, prompting an increase in meat trade. While overall meat trade is forecast to rise by 3 percent, several factor could modified this outlook. These include: the framework for resuming beef trade between the United States and Japan, the assessment of dumping penalties on Canadian hogs, food safety concerns related to dioxine in EU feeds, and mechanisms for facilitating trade from disease-free zones in AI-affected regions. Supplier competition in meat markets will be additionally influenced by exchange rate movements along with the potential impact of shifts in consumption preferences for meat from alternative suppliers in 2004.