May 18, 2006

 

Meat, the challenges and outlook at VIV Europe

 

An eFeedLink Exclusive

 

 

It has not been termed the Livestock Revolution for nothing.

 

Closely linked to population and income growth, demand for meat has exceeded that for other global commodities in recent years. As global consumers add more meat to their diets, producers and processors will have to find ways to put more of it on the table, while ensuring adherence to food safety laws and respect for sustainable animal production.

 

Highlighting a common issue close to the heart of every business in the feed-to-meat chain, VIV Europe kickstarted the first of its three-day show with a seminar "Global Trends in Meat Production and Impact of Animal Diseases", delivered by a panel of keynote speakers.   Delving straight into the topic, the Food and Agricultural Organisation's meat trade specialist Nancy Morgan began the session with meaty morsels of information on the dynamics of world meat trade, taken from the FAO's latest meat trade database. Among the facts: four-fifths of global meat production now resides in developing countries; meat trade would have risen from 7 million tonnes in 1974 to an estimated 20 million tonnes by 2006; and the developing world now accounts for some 60 percent of global meat exports.   Yet the market appears dominated by several giant meat-eaters, namely China, the European Union and the United States, which together make up 54 percent of world meat demand. As the world's largest meat importer, Russia was singled out as a definite market to watch, as was neighbouring sumo-sized importer Japan.

The distinguished panel of speakers at VIV's    opening seminar on global livestock trends, taking    questions from the floor

 

In tandem with changes in the dynamics of the global livestock sector, several policy trends were highlighted as crucial in shaping the outlook for livestock production. These include anti-dumping duties, particularly for corn and other key feed ingredients, protectionist measures and disease factors leading to import bans on meat, and food safety issues.

 

With trade liberalisation, access to growth markets and inherent comparative advantages in production have become the key factors at play, shares Rabobank's Nan-Dirk Mulder. Yet the single, most important element of uncertainly lies in animal disease outbreaks, which have time and again threatened to run livestock producers to the ground and businesses into the red.

 

Bird flu, for instance, had set the US poultry industry back by some US$142 million a month in export income, estimates James Sumner, president of the International Poultry Council. Foot-and-mouth disease brought losses of about US$9.2 billion to the UK cattle industry. And the cost of bird flu to producers in Asia, and now the Middle East and Europe as the disease spreads westward, has run into the hundreds of billions of dollars, and counting.

But all is not lost. As the dynamics of the global meat market continue to evolve, producers have quickly learnt to react to the changing rules of the game, and emerged the better for it.

 

Moving from fresh or frozen meat to the higher value-added cooked products has helped Thailand carve a niche in the broiler meat market, says Vanus Taepaisitphonse, CEO of Thai broiler integrator Betagro, although he adds that poultry meat production in 2006, at a projected 310,000 tonnes, still lags behind the pre-bird flu level of 550,000 tonnes in 2003.

 

Despite FAO assessments that 2006 will show the slowest growth in meat consumption growth since decades, dragged down particularly by the bird flu-led slump in poultry meat demand, a robust global economic outlook, stable feed prices and lower exchange rate volatility for the year will help tip the scales into balance.

 

What then should feed and meat industries make of this? Mitigating risks are several strategies for businesses. Branding, product range diversification, flexible production and further processing are already commonplace in an industry that is fast undergoing vertical integration, consolidation, and displaying increasing regional and international expansion.

 

Big names descend on VIV Europe, from May 16 to 18

Developed economies have taken the lead in this aspect, although competitive producers in Asia, Latin America and other key production regions are definitely not too far behind, says Paul Janssen, agribusiness director at Sovion NV.   Some 30,000 visitors are expected at VIV Europe 2006, which has over the years attracted a loyal following among the industry's biggest names through its successful branding as the world's biggest feed-to meat trade fair. Participants from an estimated 130 countries will have visited Utrecht, the Netherlands by May 18 when the three-day show ends, including some 600 suppliers from 45 countries.   Clearly, an industry that lives up to standards of food safety, traceability and quality assurances to consumers--themes which have become hallmarks closely associated with VIV brand--will ensure the Livestock Revolution a good many more years to come.

 

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