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Feed Bussiness Worldwide: December 2014
Asia, the Americas and red meat
by Eric J. BROOKS
Agribusiness's last fifteen years have been keynoted by a deepening relationship between population dense East Asia and the plentiful land, water and feed crop resources of the Americas. This can be seen how in just 15 years, China's soy imports went from 10 million tonnes in 1999 to over 74 million tonnes in 2014 - with the entire 64 million tonne increase supplied by the United States, Brazil, Argentina and to a lesser extent, Paraguay.
While feed crops will continue to dominate the volume of North and South America's agribusiness trade by volume, Asia's transforming consumption patterns is bringing another commodity class back to centre stage, especially in terms of value, if not volume: Red meat.
On one hand, as Asians grow wealthier, national appetites for feed-inefficient protein lines like beef and pork quickly exceed the available arable land area. On the other hand, governments respond to these demographic changes by making policy decisions on what agribusiness commodities they will import and which they will produce at home.
Land poor East Asian governments like China, Indonesia, Philippines and Vietnam seek to produce as much protein as possible from their very limited feed resources. In the last five years, they are opting to do so by focusing on poultry and aquaculture while allowing their imports of feed-inefficient red meat to take off.
Coinciding with a steep drop in feed costs and a comparably sharp rise in hog and cattle prices, Asia's new found love for red meat is redefining North and South America's role in the global agribusiness economy.
This is not to say that North and South America's exports of corn, soy or fishmeal will stop mattering to Asia: They matter now more than ever before. But while feed crops may continue to dominate the agribusiness relationship volumes between Asia and the Americas, the relationships value-added component will increasingly be defined the flow of beef and pork from Brazil,America and Canada.
Some of these countries are already shifting the focus of their export relationship with Asia towards meat; others are constrained by a coincidence of supply chain and domestic consumption factors.
In the pages that follow, we examine the trends and challenges facing North and South America's three top meat exporters.
The full article is published on the December 2014 issue of FEED Business Worldwide. To read the full report, please email to inquiry@efeedlink.com to request for a complimentary copy of the magazine, indicating your name, mailing address and title of the report.
