Expansion in global poultry meat output slows

Of all global meat sectors, only poultry production is forecast to grow during this year, according to the FAO. However, this growth is not expected to be achieved by all major producing countries.

(Annie Andre | Freeimages.com)
(Annie Andre | Freeimages.com)

At 2.4%, world poultry meat production is expected to increase year-on-year at only about half the rate of growth recorded in 2019. Global output is likely to reach around 137 million metric tons (mmt), according to the United Nations’ Food and Agriculture Organization (FAO) in the latest edition of its Food Outlook. Its estimate for world production in 2019 is 133.6 mmt.

As with all averages, the trends are expected to vary between countries. While poultry meat output is expected to expand in China, the European Union (EU), Brazil, and Mexico, FAO forecasts contraction in India, Thailand, Turkey, and the United States.

Direct and indirect impacts of the coronavirus (COVID-19) pandemic account for some of these differences.

For China, FAO considers the main driver for growth to be lingering high pork prices as the result of lost production from African swine fever. Expansion in poultry processing facilities will likely drive expansion in the EU, while Brazil’s output will come from strong export demand. Meanwhile, demand from its home market will help push up output in South Africa. In Mexico, relatively cheap feeds and improved genetics are expected to drive expansion this year.

The coronavirus-related lockdown will reverse previously expected expansion in Indian poultry meat output, according to the FAO. In Thailand, domestic demand was hit by the forced closure of street food vendors. As food service outlets were closed and labor shortages occurred as the result of the pandemic, U.S. poultry meat production is expected to dip this year. As the requirements to maintain social distancing and install screens may be prolonged, processing efficiency in the U.S. is expected to decline this year.

Stagnation forecast for global poultry meat trade   

Compared to last year, 2020 poultry meat trade will be down slightly at 14 mmt. This represents a reduction of 0.3%, according to the FAO. The figure contrasts with steady expansion over the previous 4 years — most recently, an increase of 2.9% in 2019.

While demand for poultry meat imports is forecast to rise in China — by as much as 17% year-on-year — Japan, and Mexico, there will be weakening from some major importers such as Cuba, Saudi Arabia, and South Africa.

As for output, poultry-exporting nations are not expected to be impacted equally.

For the U.S., Brazil, and Belarus, FAO forecasts rising volumes in trade. In contrast, overall stagnation in global demand is forecast to dampen trade from some traditional exporters, including Argentina, Thailand, and Turkey.

Global meat trends: output, trade, prices

For all meats, FAO forecasts a contraction in world meat production in 2020 to 333 mmt. From last year’s estimated total of 338.9 mmt, this would represent a reduction of 1.7%.

Of the major meat types, poultry is the only one to likely to achieve a significant increase. As a result of widespread African swine fever outbreaks, pork output is forecast to be down by 8% at 101 mmt. FAO expects beef production to be around 1% lower at 72.0mmt, and sheep meat to be up to the same degree at 16.2 mmt.

According to the FAO meat price index, overall prices have been falling steadily over the first 5 months of 2020. Key factors were over-supply and trade disruptions. For the January-May 2020 period, the FAO Meat Price Index was 4.5% higher year-on-year.

For global meat trade, Chinese imports will continue to be the key driver of trade, according to the FAO. It forecasts a total volume of meat traded in 2020 of 37mmt, which is 2.4% more than the estimate for last year. However, it would represent a marked deceleration in the growth of international meat trade, which stood at 6.8% in 2019. With trade in poultry, beef, and sheep meat stagnating, all of the increase in meat trade is forecast to be in pig meat.

Published earlier this month, the full title of the FAO report is “Food Outlook - Biannual Report on Global Food Markets: June 2020.”

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