Chicken's future is bright compared to other animal proteins, but the long term growth of the market will likely be shaped by global resource availability.
Dr. Paul Aho, a poultry industry economist and consultant with Poultry Perspective, shared his outlook on the global grain and meat markets during his remarks at the 25th Latin American Poultry Congress in Guadalajara, Mexico, on September 27, 2017.
Poultry’s present and near future
Driven by low global grain and energy prices and growing demand, Aho predicted chicken meat production will rise globally in the short term. Globally, grain prices are reaching their floor and prices will eventually start to rise again.
The growth of chicken production is influenced by population growth, global per capita income, production cost and the behavior of competing animal proteins. In the next 10 years, Aho said, the U.S. will retain its place as the world’s leading chicken producer, followed by Brazil, China and the European Union.
The U.S. market is already saturated, so the path to continued growth lies in exports, Aho said. Between 2017 and 2027, production will likely grow by 1 percent – to 20 million metric tons from 19 million metric tons – and exports will grow by 0.5 percent – to 3.6 million metric tons from 3.1 million metric tons. Most of the country’s exports will be in the form of leg and thigh meat. Mexico represents a quarter of the U.S. export market and possible trade policy changes could affect its future viability.
Optimism or alarmism?
The further future of the global poultry industry will depend heavily on the sustainability of agriculture. In a system with limited resources, like the Earth, endless growth is not possible, Aho said. Therefore, grain production will be a limiting factor for all animal agriculture.
Fortunately for the industry, poultry is more sustainable than competing animal proteins because chickens produce more meat with comparatively less grain. Chicken takes about 1.6 kilograms of grain to produce a kilogram of meat. Hens need 2 kilograms of grain to produce a kilogram of eggs. Comparatively, cows require 6 kilograms of grain and pigs require 3 kilograms to produce a kilogram of meat.
The vision of the future, then, is shaped by two schools of thought: optimism and alarmism. The optimists think there will always be plenty of arable land, energy and water; technology will solve challenging problems and that global climate change is a problem for the distant future. Alarmists, on the other hand, think technology will not be a panacea; the planet’s agricultural resources are limited and that climate change will affect the world relatively soon.
Already, Aho said, the world is using the renewable resources of two Earths thanks to modern technology and methods. However, the world’s supply of arable land is shrinking due to urbanization, salinization, erosion, population growth and desertification.
The future of corn production is also in question, Aho said, because of the use of non-renewable inorganic fertilizers. Corn grown without fertilizer yields about 4 metric tons per hectare while corn grown with fertilizer yields about 10 metric tons per hectare. Corn production, he said, is made possible largely by non-renewable resources.
Future of meat consumption and production
Given those challenges, what level of global meat consumption can be expected in the future? An optimist would say consumption could double by 2050, Aho said, an alarmist would say consumption will only grow by 50 percent in the same time span. By 2050, the per capita consumption of pork and beef will likely shrink while chicken, eggs and farmed fish will grow significantly.
The future of poultry production, however, will be shaped by higher energy and grain costs as well as global climate change, Aho said. Poultry production will grow, but slower than expected.
