April 24, 2008

Rapid rise in global meat demand expected in next few years
 

Global demand for meat products would expand rapidly in the next few years, which would provide attractive returns for the livestock and meat sectors, according to Kona Haque in a report on Wednesday, an analyst with the Macquarie Bank.

Meat consumption is on an upward trend in major parts of the developing world, said Haque. One of the largest consumers would be China, she said, as it has a projected economic growth of 8-10 percent a year and a 1.2 billion large population.

China's beef consumption has increased by almost 8-fold in the last 20 years, while pork jumped 140 percent.

The rise in China's meat consumption is overwhelming but not surprising when reviewing the meat consumption history of Japan, said Haque.

Japan's meat consumption levels in 1960 were very low but it went up by almost 6-fold in the next 35 years following its economic boom, and the very same thing could happen to China, according to the report.

However, Haque said that global meat production could plunge in the medium term.

The US and Australia have suffered from poor pasture conditions and droughts in the past two years while China is plagued with blue-ear disease, a combination that is creating a hole in the supply chain.

Cattle herd in the US is currently on the decline as herd numbers are reduced to cut costs, said Haque, citing that cattle producers are having difficulties in remaining profitable due to surging feed costs and weak returns. 

In 2007, the Food and Agriculture Organisation reported that global pork production dropped by 1 percent to 106 million tonnes.

Further production declines are likely to take place in the next few years due to the strong impact of soaring feed costs, said the report.