Better year predicted for meat sector

Growing meat demand and falling feed costs point to a good year ahead for the meat sector, according to Richard Brown, director of market research firm Gira.

Global meat consumption should grow 1.5% in volume this year, driven by better economic growth in the recovering eurozone and the continued surge of China, Mr Brown told the AHDB Outlook conference in London.

He said the price outlook seemed positive with a tighter global meat supply, falling feed costs and a robust 2% increase in meat trade.

“There is some risk of things going horribly wrong but it seems to us a risk lower than in previous years.

“The outlook is better,” Mr Brown said.

“We have got worldwide a good growth of expenditure on meat.

The China effect

  • Demand from China up across all meats
  • Chinese demand for pork strong
  • Growing Chinese sheepmeat imports, particularly from New Zealand and Australia
  • Chinese demand leading to less pressure directed at Europe – meat import volumes to EU have been stable or in gentle decline since 2008
  • China, Middle East, North Africa and Russia pay more attractive prices to some of the big exporters

“It is a fundamentally better time in this period, with peaks in 2008 and 2011 that have been sustained, with people spending more money on meat. That is quite positive.

“So there’s all reason for a better living for producers and in the long run a better time for processors.”

See also: Livestock trade outlook hangs on supply and demand

Mr Brown said he expected relatively higher producer prices for meats to continue and despite a potential small drop in 2014, the price level would be much higher than 2006-07 and the tough times before that.

“They will be fundamentally higher and it will be fundamentally possible for the producer to make more money after a long period that was pretty gutty.”

Mr Brown said the world trade dynamics were changing, with high meat prices in China and Russia relative to the other markets.

Exports from Europe to growing world markets, especially in pork, had grown.

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