USDA Bi-Weekly International Meat, Poultry & Egg Review
13 November 2015
International Trade Highlights:
On October 28, the World Trade Organization (WTO) announced that it had published its key statistical publications. The reports are International Trade Statistics 2014, World Tariff Profiles 2014, Trade Profiles 2014, and Services Profiles 2014. To view each of these reports, visit the WTO website at https://www.wto.org/english/news_e/news15_e/stat_29oct15_e.htm.
The Food and Agriculture Organization (FAO) of the United Nations recently issued its bi-annual Food Outlook report. According to the FAO, during 2015 world meat production is forecast to increase 1.1 percent over 2014 to 318.8 MMT. The largest increase is expected in the EU, U.S. and the Russian Federation.
The pig meat sector is forecast to drive the global growth after poultry, with only slight gains in bovine and ovine production. World beef production is predicted to total 68.3 MMT, which is a little higher than 2014. In South America, inadequate rain has impinged on cattle availabilities for slaughter in many countries. Brazil has had two years of unusually dry weather, and as a result has affected cattle conditions and calf development causing prices to rise and encouraging producers to retain stock. Additionally, little growth in production is anticipated in Argentina as adverse weather conditions have weighted on the calf crop and government export restrictions limit the extent to which sales abroad can be increased. Growth is expected from Paraguay and Uruguay, spurred by international demand and attractive cattle prices and is supported by productivity increases. Beef production in India is expected to continue to expand its industry. The U.S. is anticipated to see bovine meat production stabilize in 2015, as higher slaughter weights, assisted by cheaper feed costs, should largely counterbalance a decline in slaughtered cattle numbers as a result of calves being retained for herd expansion. Output is forecast at 11.1 MMT, its lowest level since 1994. In Australia, strong international prices are expected to foster and increase in slaughtering, further reducing the national herd in 2015, which may fall to a 20 year low. As a result of the culling, output is predicted to increase over 2014 and the third year of exceptionally high performance. Beef production in New Zealand is expected to be substantially higher, as a result of drought and lower milk payouts to farmers, which led to curtailment of dairy herd expansion. During 2015, world pork production is forecast to total 118.8 MMT, 1.3 percent more than 2014, which represents a reduced rate of expansion compared to the previous two years. China’s pork production, which accounts for almost half of the world output, is expected to stagnate, which is the main reason for the slow down. An unfavorable feed-pork price ratio in the country and new environmental regulations have caused farmers to reduce breeding sows, stalling growth. Production in Japan and the South Korea continues to be affected by last year’s outbreaks of porcine endemic diarrhea (PEDv). Brazil is set to increase output, stimulated by reduced feed costs. Pork production in the EU is expected to maintain the expansion seen last year, based on both augmentation of the breeding sow herds and heavier slaughter weights. In the U.S., pork production is projected to rise as recovery from the effects of porcine epidemic diarrhea (PED) continues. After stagnating in 2014, world sheep and goat meat production during 2015 is predicted to show limited growth, reaching 14.0 MMT. In Oceania, drought imposed herd reduction and subsequent rebuilding are anticipated to constrain production output. During 2015, world meat trade is expected to decrease slightly from 2014 to 30.5 MMT. World beef trade is forecast at 9.7 MMT, 1.0 percent higher than 2014. Supply limitations are forecast to be the principal factor behind the slowdown, as import demand should remain firm in most countries. China is expected to be little changed, after registering substantial growth for a number of years. Higher levels of purchases are anticipated for Japan, Malaysia, Canada and South Korea, whereas Vietnam, Chile, Iran, Russia and Venezuela are predicted to import less. Imports by the U.S. are expected to rise, assisted by a strong U.S. dollar and limited domestic supply, due to herd rebuilding. Strong overseas deliveries by Australia are projected to become the largest international supplier of bovine meats, surpassing India and Brazil. Sales by India are predicted to fall, as a result of a substantial drop off in shipments to Vietnam, its main market. Likewise, Brazil may have to cut sales abroad due to limited supplies of replacement calves and sustained domestic demand for beef. World pork trade is expected to remain relatively unchanged at 7.0 MMT. The major factor contributing to the drop is the reduced import demand by Russia. Imports by Japan are also expected to decline. Conversely, a number of countries are anticipated to increase purchases of pork, including the U.S., South Korea, Mexico, China and Australia, although not sufficiently to counteract declines elsewhere. Pork exports are predicted to show strong growth in the EU, as a result of seeking alternative markets after Russia’s imposed ban. Pork exporting countries, such as the U.S., Canada and Brazil are forecast to see retrenched shipments, as a result of an overall weakening of international demand for pork. During 2015, sheep and goat meat trade is forecast to fall 4.9 percent from 2014 to 976,000 MT. Australia and New Zealand have entered a phase of flock restocking, resulting in reduced shipments. However, smaller scale exporters, such as India, Pakistan and Ethiopia, could see sales grow. Reduced world export availabilities are expected to limit import flows, especially to China, the EU, Canada and Japan. Although, countries such as the U.S. and Malaysia may increase their purchases of ovine meat. Per capita meat consumption during 2015 is forecast at 43.4 KG, up slightly over 2014. The complete food outlook report can be found on the FAO website at http://www.fao.org/WAICENT/faoinfo/economic/giews/english/fo/index.htm.
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