The consumption of meat is a luxury for most people around the world. This basic fact of life has two important consequences. First, in good economic times, the consumption of meat rises fast as consumers spend extra income disproportionately on meat.

The second fact, and the flip side of that coin, is that in poor economic times the consumption of meat can fall as consumers cut back, again disproportionately, on meat. The demand for meat is said to be income elastic, a small change in income results in a big change in expenditure, both up and down.

Of course, the income elasticity (chart) of demand varies greatly between countries. Here are some examples taken from a USDA study:

A change in income in Denmark will probably not affect the consumption of meat in that country; however, a change in income in Nigeria will reduce meat consumption significantly.

The world as a whole is, on average, similar to Mexico. If the world economy slows down significantly, as it is expected to do this year, the amount of money the world spends on meat will decline.


As shown on the graph, the world economy rose at an unusually rapid rate of over 5% in the years 2004-2007, spurring meat consumption of all kinds. Even in 2008, world growth was relatively robust. However, the direction was down. World growth in 2009 (chart) is expected to average just 2% a level that will qualify 2009 as a "world recession."

Chicken does better than other meats

Although meat demand as a whole is likely to be lower this year, what about chicken demand?

As a low-priced alternative to other meats, chicken should do better than the competition in economic downturns. Nevertheless, this downturn is so severe that chicken will be affected as well as other meats. Chicken is bound to fare better than other meats, but even chicken will be affected by this overall downturn in meat demand. World chicken production increases may fall to as low as 1% this year before rebounding in 2010.