Turmoil in world economies in 2009 has made any attempt at forecasting the outlook for meat seem even more difficult than usual. What we do know is that the global production of pork recorded another annual increase in 2008.
New estimates from the FAO food and agriculture organisation of the United Nations say that, out of about 282 million metric tons of all meats produced worldwide last year, pigmeat accounted for 103.91 million tons or almost 37%. Poultry meat’s contribution was 93.7 million tons or slightly over 33% while beef contributed 64.9 million tons or 23%.
A year earlier, on updated FAO data, approximately 36% of world meat output had been in the form of pork, compared with nearly 33% for poultry and under 24% for beef. The revised estimate for the volume of pork produced in 2007 is 99.8 million metric tons.
The first of our accompanying charts (Figure 1) shows the trend in annual pigmeat production since 1990, as indicated by FAO’s revised figures for the most recent years. It seems now that global output was over-estimated previously for 2006 and 2007. At one early stage the database even pointed to an increase having occurred in 2007, although later on this was altered to a downturn. The scale of the reduction was put first at around 3% before being adjusted again to double that rate.
After such a contraction in the wake of the record-high feed grain prices of that year, a recovery to growth in 2008 was virtually inevitable. The market analysts at FAO put the rise in 2008 tonnage at over 4%. They think that another 2% can be added in 2009, taking the total to 106 million metric tons or approximately the level achieved in 2006. In their view, less pork will be produced this year in Europe and the USA and also in other key countries including Korea, but the further rise expected from places such as China and Vietnam will more than compensate.
However, note that these expectations were set before the full impact of the H1N1 influenza virus could be predicted. The projection for 2009 included a gain in tonnage for Mexico, for example, whereas the Mexican market has been devastated by the arrival of the flu virus and its mistaken label as having a connection to pigs and pork.
Earlier this year, the US department of agriculture (USDA) in its assessment of world meat markets said it thought that growth in China in 2009 would be enough to raise the global pork tonnage by 2%, despite lower production for most other major producers. Its expectation at the time for the USA was that a downsizing of sow numbers and the fact of importing fewer pigs from Canada would combine to see national output decline from around 10.6 million metric tons in 2008 to a total this year of just over 10.3 million tons.
These expectations and the department’s own baseline projections provide the basis for the chart in Figure 2. This suggests a V-shaped pattern of current reduction followed by sustained recovery for US pork production over the coming 10 years. On the same chart we have included for comparison a projection of pork production in the European Union, as seen by the European Commission in Brussels.
Information presented at the 2009 World Pork Expo by Glenn Grimes, emeritus professor of agricultural economics at the University of Missouri-Columbia in the USA, confirmed that production by the US pork sector had reached 105.9 million metric tons in 2008. Producers in 2008 faced a production cost that averaged out over the year at US$13.85 per 100 pounds liveweight (equivalent to US$6.28 per 100kg) above the average for the period since 1996 while receiving a price that was only US$260 above the 13-year average.
Loss-making looks set to continue in the coming months, now that the influenza story has joined recession in affecting the demand for pork. He predicted a 3.8% decrease in national pig slaughterings in 2009 down to a level of 28.49 million pigs, pointing to forecasts that the volume of pigmeat produced nationally this year will drop by at least 2.6%.
Internationally, it now seems that global economic weakness will cut the trade in pork among countries for the rest of 2009. Both the USA and the European Union are forecasting reduced sales to other parts of the world and there are also indications that Brazil is preparing for reduced exports.
Some support for that view is offered by Table 1, which sets out the predicted trade patterns for 2009 compared with those for the past two years. On the basis of the production figures shown in the Table, Asia-Pacific provided nearly 56% of the world’s pork in 2008. Another 25-26% came from Europe and just over 12% from North America. Latin America delivered slightly more than 6% and Africa almost 1%.
When the European Commission published its latest review of prospects for meat in Europe, this said that Europe’s status as a net exporter (across the total of all meats) would continue to weaken in the next 10 years as demand grew faster than production in the 27-country European Union (EU). Its medium-term projections for pigmeat depict a 1.7% increase in production between 2007 and 2015, so growing at a slower pace than in the past decade. But the demand for the meat is seen rising by 3.8%, leaving less for export so that EU net exports show a steady decline (see Figure 3).
Although the commission thinks that the growth in the domestic demand may slow in the short term, it includes a declaration that pork will remain the most preferred meat for EU consumers. Pigmeat in Europe is predicted to maintain its status of representing half of all meat eaten per person/year, followed by poultry whose share is thought likely to rise from 26.5% to 28%. Beef looks to be the loser in the period 2008-2015, dropping its own market share by around 1.2% during this time.
Our own annual review of world pork market data has as its core each year a listing of the Top 20 countries for production. See in Table 2 that this year’s version adds an indicator of the ranking for these countries on previous lists published for the years 2000 and 2008. Evidently there have been some highly significant movements since the start of the decade, not least involving Vietnam’s rapid rise up the list and a slippage for several European states.
For comparison purposes the EU-27 is often taken as a single entity, to assess alongside the other global giants of China and the USA. The records for the 27 current members of the European Union reveal that their combined net output of 26.4 million metric tons in 2004 rose to 21.64 million tons in 2005 and 21.93 million tons in 2006. The total now being quoted for them in 2007 is 22.84 million tons, with 22.44 million tons estimated for 2008. The first guess at Europe’s production of pork in 2009 has been approximately 21.75 million tons.