The market for all meats in 2013 has been represented on the demand side by rising incomes from growth in developing countries and high nominal output prices; whereas on the supply side, high input costs, specifically grains for feed and energy-related expenses, have also affected growth. Over the next decade, meat prices are expected to remain high as meat production slows while demand, driven by developing countries such as China and India, remains strong.
Specifically, per capita food consumption in developing countries will grow at 0.7 percent from 2012-13, nearly double the per-capita consumption growth rate of 0.3 percent in developed countries and the world average of 0.4 percent from 2012-13 (Table 1). Poultry and pig meats remain the most-consumed meats around the world, accounting for nearly two-thirds of the "meat basket" used to factor consumption.
Rising incomes, urbanization lead to consumption gains in animal protein
Higher incomes, urbanization and changing diets that include consuming more animal proteins will spur demand for pig and poultry meats, especially in Asian countries. In China, income has more than doubled in the past decade and nearly tripled over the past two decades for rural residents (Figure 2). Reforms in China have increased rural incomes and living standards, thanks to higher agricultural growth, elimination of the agricultural tax and increased agricultural subsidies. Higher incomes for rural residents will help them to increase spending on food for consumption, including more-demanded animal proteins like poultry.
Per capita food consumption of 32.5 kg in 2011 in developing countries increased to 33.1 kg in 2012 and 33.3 kg in 2013 as dietary preferences change. Higher meat consumption in developing countries is also being driven by the rising population in Africa. According to the United Nations, Africa's population has grown at a rate of 2.47 percent from 2005-10 and is growing at a rate of 2.46 percent annually over the period 2010-15 (Table 2). Africa's growth rate percentage, historically the highest region in the world, again remained above the world's average growth rate percentage of 1.2 over the 2005-2010 period and above the world's estimated growth rate of 1.15 percent over 2010-15.
Global meat production, which grew at a rate of 2.3 percent annually over the decade from 2003-12, is expected to slow to a rate of 1.6 percent per year for the period from 2013-22, according to projections from the Food and Agriculture Organization of the United Nation (FAO)'s latest FAO-OECD Agricultural Outlook publication. Poultry meat production growth - a key driver of overall growth in the previous decade - is projected to slow to just 1.9 percent per year over the period from 2013-22, significantly lower than the growth rate of 3.7 percent per year experienced from 2003-12. From 2012-13, poultry meat production is projected by FAO to grow 1.8 percent (Table 1). Nearly 104 million metric tons of poultry meat was produced in 2012, while between 106 and 108 million metric tons will be produced in 2013, according to FAO projections (Figure 1).
Meat prices reach highest levels in past decade
In 2012, meat prices in real terms reached their highest levels in 15-20 years. Prices are expected to remain higher through 2022, though fall slightly from current levels by 2022, impacted by high feed costs, rising demand from developing countries like China and a slowdown in meat production. Specifically, for poultry, price adjustments to account for higher feed costs have already been made in 2012 and early 2013, so real prices over the next decade should remain flat, generally following real feed prices, FAO forecasts (Table 3). Both in the U.S. and Brazil, major poultry producers, prices reached their highest point in 2011 and 2012 into early 2013, but are slowly leveling off.
Following the ban on battery cages that took effect on January 1, 2012, in the European Union, prices of eggs in the EU have risen, following a global trend spurred by higher input costs, as producers have invested more to convert existing cages so that they comply with the new legislation. With traditional cages now banned from the EU, some 42 percent of the EU's laying hens are housed in enriched cages (Figure 3). Of the total 496,960 hens in the EU in 2012, more than a quarter were housed in other types of housing systems while 19 percent were housed in barns.
The global market for poultry meat and eggs currently faces a number of uncertainties, including environmental pressure and macroeconomic concerns. The market will be influenced in the future, as it was in 2012-13, by animal disease outbreaks that could limit production of safe poultry meat and eggs, including China's highly pathogenic H7N9 avian influenza and Mexico's H7N3bird flu. Poultry market growth will also remain dependent on grain prices, thus affecting animal feed prices, and consumer income growth.
