Developing countries are expected to account for 80% of the growth in global meat production. Per capita meat consumption growth will slow as major developing economies approach the levels of developed countries, while poultry remains the least expensive and most popular choice and accounts for around 50% of the increase in meat consumption.
The market situation for the meat sector is generally characterised by high nominal output prices, underpinned on the demand side by rising incomes from rapid growth in the developing countries, and on the supply side by high input costs, notably for feed grains, energy related inputs and labour. The combined effect of higher output prices and increased production costs tend to favor production in developing countries, where low input production systems prevail. Meat production growth has slowed down, notably for poultry which in the past has experienced the highest rates of output increases.
Meat demand in developing countries continues to be strong as higher incomes and urbanisation lead to food consumption changes favouring increased proteins from animal sources in diets. Consumption levels have risen substantially in many emerging economies, particularly in China and other fast growing Asian countries in the last decade. However, per capita meat consumption has been stagnant in the OECD area over the last ten years. While growth in both production and trade is envisaged in the short term for poultry, pig, sheep and buffalo meats, bovine meat markets will initially be constrained by depleted herd numbers in major exporting regions, notably in the developed countries. Developing countries will continue to strengthen their role in dictating changes in global meat production, trade and consumption.
- Meat prices will remain high in real terms over the next decade due to changing market fundamentals of slower production growth and stronger demand. Market tightening arises from the combined effect of high feed grain prices over the past six years which have substantially moved through the supply chain leading to reduced livestock producer margins and depleted livestock inventories in some of the major meat producing countries. At the same time, demand remains firm from rising incomes and population growth particularly in the emerging economies of the BRICS and more generally in many other developing countries.
- Global meat production is expected to grow at a moderate pace this decade, constrained by higher input costs and competing demand for land and water from alternative crops. Meat production growth is projected to slowdown to 1.6% p.a., compared to 2.3% p.a. in the previous decade. In the past decade, the key driver behind the fast pace of meat production growth was the poultry sector, but it will also be largely responsible for the rapid deceleration in meat production over the next decade. Poultry meat production growth slows from 3.7% p.a. in the last ten years to 1.9% p.a. in the projection period. Meat production growth is dominated by developing countries, which will account for approximately 80% of the additional output to 2022.
- World meat consumption continues to enjoy one of the highest rates of growth among major agricultural commodities. But in some parts of the globe, demand appears to be reaching saturated levels in per capita terms, leading to a slowdown in growth. The pattern of slowing consumption growth may strengthen over the next decade. Although demand growth for poultry is also expected to slow in coming years, it remains the leader in the meat complex, due to its status as the cheapest and most accessible source of meat protein. As such, it is expected to account for nearly half of the additional meat consumed by 2022 relative to the base period (average 2010-12). In developing countries, annual per capita meat consumption will increase by 2.6 kg r.w.t. over the period, with poultry accounting for 60% of this increase. Growth is led by the emerging economies of the BRICS which is projected to post a 4 kg r.w.t. gain in consumption, and if India is excluded, the average gain is a large 8 kg r.w.t. per person, reaching over 60 kg r.w.t. by 2022, and approaching the level of 66 kg r.w.t. in the OECD area. While remaining high in per capita terms, consumption in the OECD area has largely been stagnant for the last decade, due to various factors including population aging and changing demographics as well as increased health and dietary awareness.
- World meat exports are expected to increase by 19% by 2022; i.e. an annual increase of 1.6% which compares to 4.3% p.a. in the previous decade. Poultry and bovine meat shipments are the primary drivers of export growth, which together account for 80% of the additional trade.