ANALYSIS - Economic growth and higher global consumption point to a positive future for beef and dairy demand, writes Chris Harris.
Richard Brown from the market analysts GIRA, speaking at the Agricultural and Horticultural Development Board Outlook conference said that meat consumption is expected to grow by 1.5 per cent this year in volume, while producer prices are expected to remain stable or even decrease.
There is expected to be a modest growth in meat demand and feed costs for the first half of this year will be down.
The recent volatility experience by the meat and livestock sector is expected to reduce with little volatility this year.
There will be further robust growth in global meat trade by about two per cent.
Last year the growth in meat consumption was modest at just 0.7 per cent because the meat chain was worried about feed costs, Mr Brown told the conference.
However, that growth is expected to more than double to 1.5 per cent this year largely based on a growth in chicken consumption.
Mr Brown said there will be less growth in the beef and sheep meat sectors because of tight supply.
The pig meat sector has seen modest rises over the years with consumption last year rising by one per cent to 101.777 million tonnes and a forecast growth of another 1.1 per cent this year to 101.882 million tonnes.
Mr Brown said that there has been good growth in expenditure on meat from 2002 and there are expected to be better times ahead for both producers and processors.
He added that global prices have been rising for meat, although pig meat prices took a knock because of disease problems in China.
Generally, however, the meat and dairy protein trade is growing worldwide, with the trade in chicken in the Middle East and North Africa leading the way.
“China is a clear story of import growth and is extremely promising for the meat industry,” said Mr Brown.
He said there is growth across the species with now considerable quantities of sheep meat going into China.
“Demand is there. The prices are there and the need is there in China,” he said.
Mr Brown added that pig producer prices in China are very high, with a big gap between the Chinese prices and those in the main exporting countries.
Because of this gap, China has become very attractive for those exporting countries such as the EU, Brazil, US and Canada.
Mr Brown said that the prices of pig meat in Russia are also very high and the pig sector has become very profitable.
“There is a lot of political manipulation of the prices in Russia, with the long term idea of continued government support for the pig sector,” Mr Brown said.
Because the Doha development round of the World Trade Organisation talks appear to be making little progress, there is a rise in the numbers of bilateral free trade agreements being forged.
Mr Brown said that while the EU is protected by tariff rate quotas, there is likely to be some more meat and dairy products entering Europe.
However, he said that is also likely to be growing interest for British meat and dairy products offering good prospects for exporters.
“We have opportunities in export markets and we need to get ourselves organised,” Mr Brown said.
“We need to benefit from the growing world meat market.”
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