Livestock and Poultry: World Markets and Trade

Transcription

1 Department of Agriculture Foreign Agricultural Service October 2, 27 Livestock and Poultry: World Markets and Trade s Meat and Poultry Import Forecast 28: Decline and Constrained Growth s beef and broiler meat imports are forecast to rise and 7 percent, respectively, in 28. Despite robust Chinese demand coupled with stagnant or declining production, additional growth in imports is constrained by restrictions which limit supplies from the, a key global trader. The is currently not eligible to export broiler meat to due to highly pathogenic avian influenza (HPAI) restrictions. Even though the regained access to s beef market in May 27, shipments are likely to be constrained in the short term due to market requirements which limit the ability of the to maximize trade opportunities. is the world s second and seventh largest beef and broiler meat importer, respectively, accounting for and 5 percent of forecast trade. Alternatively, s pork imports are forecast to decline for the second consecutive year in 28 as domestic production gains reduce demand of imported pork. The,, and Canada will remain the principal suppliers, competing primarily on price. With relatively strong demand for processing, imports are unlikely to retreat to past levels, maintaining as the world s top importer of pork accounting for nearly one-fifth of forecast trade. The World Organization for Animal Health (OIE) declared the HPAI-free as of August, 27. Approved by the World Agricultural Outlook Board/USDA

2 Table of Contents Beef and Veal Overview Beef Summary Tables Cattle Summary Tables Special Article: U.S. Beef Regains Access to, World s Largest Growth Market Pork Overview.... Pork Summary Tables Swine Summary Tables Special Article: s Swine Herd Enters a New Cycle Broiler Meat Overview Broiler Meat Summary Tables Special Article: HPAI: A Negative for s Producers but a Positive for Traders Notes to Readers 25 Livestock and Poultry: World Markets and Trade Foreign Agricultural Service/USDA October 27

3 Beef and Veal Global production is forecast to grow nearly 2 percent in 28 to 62.6 million tons with the and alone accounting for about half of the growth. will be spurred by expanding exports but potentially faces headwinds from domestic industry issues. Argentina s production will continue to be boosted by favorable policy developments and herd expansion. Having recovered from drought-induced herd liquidation followed by herd rebuilding, Australia s beef production is rebounding. Global exports in 28 are forecast nearly percent higher to. million tons, driven by shipments from, Australia, Argentina, and the. Demand in East Asia will remain robust., in particular, will continue to drive trade, as domestic production cannot meet growing consumption. Oil-producing regions will continue to be challenged by relatively low oil prices, which hamper economic growth and stymie demand. U.S. production and exports: Production is expected up nearly percent in 28 to a record 2.4 million tons, as the enters the fourth year of its herd expansion. Sustained elevated supplies and lower U.S. beef prices will boost exports to, Canada, and major markets in East Asia. The will face renewed competition in Asian markets from Australia as its herd expands. In Japan, the will also have to contend with Australia s widening tariff advantage. However, a relatively weaker U.S. dollar in 28 could further buoy U.S. beef exports. Livestock and Poultry: World Markets and Trade 2 Foreign Agricultural Service/USDA October 27

4 Beef and Veal Production - Selected Countries Summary, Metric Tons (Carcass Weight Equivalent) Oct Production 9,675 9,72 9,425 9,284 9,45 9,7 7,88 7,44 7,684 7,88 7,89 7,9 6,7 6,89 6,7 7, 7,7 7, India,8 4, 4, 4,2 4,25 4, Argentina 2,85 2,7 2,72 2,65 2,76 2,9 Australia 2,59 2,595 2,547 2,25 2,25 2,25,87,827,85,879,95,96 Pakistan,6,685,7,75,78,8 Turkey,27,245,42,484,55,6,85,75,55,5,5, 9,94,57 9,68 9,48 9,94 9,286 48,784 49,74 48,882 48,96 49,264 5,6,75,75,87,57 2,9 2,448 6,55 6,85 59,699 6,44 6,7 62,554 Dom. Consumption 7,2 7,277 7,42 7,765 7,985 8,4 7,885 7,896 7,78 7,652 7,745 7,95 7,52 7,54 7,744 7,96 7,8 7,84 Argentina 2,664 2,5 2,54 2,44 2,48 2,55 India,99 2,8 2,294 2,46 2,425 2,45,87,89,797,89,84,875 2,98 2,297,966,847,824,77 Pakistan,576,627,66,685,7,726 Turkey,222,25,457,496,52,628 Japan,22,225,86,25,26,265,7 2,62,86,79,548,847 47,4 47,58 46,54 47,6 47,7 48,26,68,24,276,678 2,9 2,524 58,742 58,749 57,89 58,74 59,62 6,55 Notes: Includes meat of other bovines for certain countries. India includes carabeef (water buffalo). From 25, the following countries are excluded: Albania, Azerbaijan, Cote d'ivoire, Georgia, Ghana, Jamaica, Senegal and Uzbekistan. The notation of a month beneath a year conveys the month in which the forecast for that year was released. Foreign Agricultural Service/USDA October 27

5 Beef and Veal Trade - Selected Countries Summary, Metric Tons (Carcass Weight Equivalent) Oct Imports ,25 Japan Korea, South , Hong Kong Chile Egypt Canada ,74 2,85,964,879,897,94 6,425 6,55 6,2 6,24 6,47 6,68,2,7,529,67,4,74 7,445 7,89 7,6 7,69 7,748 7,992 Exports India,88 2,82,86,764,825,85,849,99,75,698,76,825 Australia,59,85,854,48,45,525 New Zealand Canada Uruguay Paraguay Argentina ,65 8,8 8,57 8,26 8,56 8,76,74,67,28,59,285,2 9,29 9,997 9,545 9,422 9,79,56 Notes: Includes meat of other bovines for certain countries. Indian exports are carabeef (water buffalo). From 25, the following countries are excluded: Albania, Azerbaijan, Cote d'ivoire, Georgia, Ghana, Jamaica, Senegal and Uzbekistan. The notation of a month beneath a year conveys the month in which the forecast for that year was released. Foreign Agricultural Service/USDA October 27

6 Cattle Stocks - Selected Countries Summary (in, head) Oct Cattle Beg. Stks India 299,66,6, 2,6,6 5, 2,27 27,959 2,5 29,8 226,45 22,5,44,,45,275 99,7 98, 87,6 87,69 88,46 89,52 89,78 89, Argentina 5,95 5,545 5,545 52,565 5,55 54,25 Australia 28,48 29,29 29,2 27,4 24,97 25,5 9,9 9,564 9,52 8,879 8,68 8,8 8,52 7,76 7,2 6,65 6,49 6,585 Turkey 4,22 4,52 4,45 4,27 4,2 4,55 Uruguay,84,9 2,5 2,6,864,84 78,46 76,27 44,88 4,787 44,4 44,5 95,95 92,46 89, ,69 9,64 99,667 9,95 88,526 89,4 9,98 9,585 94,4,5,29,8, ,69 988, ,99,4,67 Production (Calf Crop) India 65, 66, 67, 67,5 68,2 68,7 48,8 47,9 49, 5, 5,5 5,9 5,85 49,6 48,22 48,25 48,5 49,5 29,5 29,28 29,9,5,,8 Argentina 4,, 4,2 4, 4,2 4,8 Australia,78,6 9,94 6,6 9,5, 6,7 6,75 6,85 7, 7,425 7,58 6,82 6,67 6,62 6,6 6,48 6,4 New Zealand 4,92 5,44 5,4 5,6 4,84 4,9 Canada 4,56 4,6 4,2 4,297 4, 4,4 8,684 7,92,79,694,752, ,46 258, ,46 25,5 257,2 26,25,7,522 4,87 5,8 6, 7, 29,9 292,68 288,2 288,24 29,42 298,5 Notes: May contain other bovines. From 25, Colombia and Venezuela are excluded. The notation of a month beneath a year conveys the month in which the forecast for that year was released. Foreign Agricultural Service/USDA October 27

7 Cattle Trade - Selected Countries Summary (in, head) Oct Imports Turkey Egypt Canada Japan Belarus 2 Ukraine ,295,25 79,7,99,6 2, 2,58,984,78,85,925,28,57 2,7 2,778,4,86 Exports,45,77,2,,2, ,, Australia 85,297,6, Canada,44, Uruguay Ukraine New Zealand ,486 5,246 4,76 4,772 4,42 4, ,647 5,54 4,89 4,84 4,52 4,85 Notes: May contain other bovines. From 25, Colombia and Venezuela are excluded. The notation of a month beneath a year conveys the month in which the forecast for that year was released. Foreign Agricultural Service/USDA October 27

8 U.S. Beef Regains Access to, World s Largest Growth Market Ryan Bedford, Agricultural Economist In May 27, the regained access to the beef market, allowing exports of fresh/chilled/frozen and bone-in/deboned product, as well as some variety meats. In the years since the lost access due to BSE, has been transformed from an insignificant buyer into the world s second-largest importer. Its domestic beef industry has been unable to boost production at the pace necessary to meet rising demand. As a result, beef imports have grown sharply since 2, reaching 82, tons ($2.6 billion) in 26. While opportunities exist for U.S. beef exports to, shipments are likely to be constrained in the short term due to market requirements limiting exportable supplies. s Rapid Transformation into a Major Beef Importer From 2 to 26, s domestic beef production grew 8 percent to 7. million tons (carcass weight equivalent), but was outpaced by even stronger consumption growth, which rose 2 percent to 7.8 million tons during the same period. s production is constrained by high costs, inadequate cold chain infrastructure, lack of investment, and a fragmented industry of mostly smallscale producers located inland which is challenged to service primary consumption centers in eastern. Unable to fully satisfy demand with domestic production, the country has increasingly looked to the international market. The data analysis in this report only covers beef as per the USDA-FAS-PSD (HS codes 2, 22, 625, 22). Variety meats are excluded. Livestock and Poultry: World Markets and Trade 7 Foreign Agricultural Service/USDA October 27

9 Robust Demand Supports Import Growth The was the lead supplier with a two-thirds market share of the then-small $5 million beef market when it lost access in 2. During the following years, s consumers steadily consumed more red meat and poultry, owing to both higher individual income levels and population growth. Although traditionally the least consumed meat, beef consumption grew faster compared to pork and broiler meat over the past 5 years as rising prices for broiler meat and pork (due to lower production) made beef relatively more affordable. Key Drivers of Chinese Beef Demand Expanding Middle Class Greater Disposable Incomes Urbanization Increase in Food Consumption Outside the Home (Restaurants) Population Grown And Fierce Competition for Those Consumers Prevails The beef market that the reenters is not only larger by several orders of magnitude, but it has also become much more competitive. Over the past 5 years, most major beef exporters have increased the share of their total trade sold to and will work to maintain these gains. In several cases, notably Uruguay and Argentina, has become an essential market. Potential U.S. exports will also have to contend with price and exchange rate differentials, competitors already established trade services, and s preference for lean versus marbled beef (which is a key U.S. beef attribute). as Percent of Traders Beef Exports Country 2 26.% 4% Australia % 9% Uruguay 4% 46% New Zealand % 7% Argentina % % Canada % 2% Source: IHS Markit Livestock and Poultry: World Markets and Trade 8 Foreign Agricultural Service/USDA October 27

10 Specified Requirements for U.S. Beef Exports to Beef and beef products must be sourced from cattle that were born, raised, and slaughtered in the, or from cattle that were imported from Canada or and slaughtered in the. Cattle must be traceable to the U.S. birth farm using a unique identifier, or if imported, to the first place of residence or port of entry. However, full traceability (i.e., all operations on which the animal resided) is not necessary. Beef and beef products must be derived from cattle less than months of age. There are no requirements for the U.S. government to certify the non-use of particular substances such as beta-agonists and other growth promotants, but reserves the right to test at the port of entry and reject shipments if there are positive detections of substances prohibited in. The Food Safety and Inspection Service (FSIS) has updated its Export Library specifying s requirements for certifying U.S. beef shipments. Beef exported to must meet extra-regulatory requirements outlined in the Agricultural Marketing Service s (AMS) Export Verification (EV) Program. Please also refer to the GAIN Report from FAS/Beijing that explains the procedures for exporting U.S. beef to. Initially, U.S. Supply of Eligible Cattle Will Limit Beef Exports to As U.S. beef producers begin adhering to the U.S.- beef protocol, as reflected in the FSIS Export Library, s requirements will limit U.S. exportable supplies. For example, as there is no mandatory cattle identification (ID) program in the, operations will utilize voluntary ID programs to show the U.S. birth farm or point of origin. Further, s prohibition on the detection of growth promotants requires ranchers to raise non-hormone treated cattle, which represent a small segment of the herd due to the reduced efficiency and increased cost of production. 2 Such cattle are sold at a premium, for example, averaging an additional $8 per cwt during January-July 27, and sold to a limited number of high-price markets, particularly EU and U.S. specialty markets. The pool of cattle already participating in these programs is limited and the biology of raising cattle implies that it will take time to increase the number of slaughter-ready cattle meeting these requirements. The has several Export Verification Programs for countries such as the EU to facilitate trade in beef. In the short-to-medium term, beef sold to will have to be sourced from this 2 Alternative Beef Production Systems: Issues and Implications, USDA Economic Research Service, April 2. National Weekly Direct Slaughter Cattle Premiums and Discounts, USDA Market News Service. Livestock and Poultry: World Markets and Trade 9 Foreign Agricultural Service/USDA October 27

11 specialized segment of the U.S. cattle herd, thus competing with demand from those markets. In the longer term, strong demand may spur more U.S. ranchers to adjust their production methods to meet market demands. With constraints on s production expansion likely to persist in the long term 4, imports are expected to continue growing. U.S. beef could therefore find ample opportunities. Outlook for Beef Imports is forecast to import. million tons in 28, percent higher than in 27. South American countries will remain the top suppliers, as, Uruguay, and Argentina maintain their strong export growth. Australia, previously the largest exporter to, will remain limited by its reduced supplies as herd rebuilding continues. U.S. beef will compete with other high-end beef supplies from Australia and Canada, but will be constrained by the terms stipulated in the protocol. However, U.S. beef has a good reputation in and may find success in upscale markets. For more information, contact: Ryan Bedford USDA-FAS,, Global Commodity Analysis Division Ryan.Bedford@fas.usda.gov, (22) International Long-Term Projections to 226, USDA Economic Research Service, March Livestock and Poultry: World Markets and Trade Foreign Agricultural Service/USDA October 27

12 Pork Global production is forecast up nearly 2 percent in 28 to. million tons, primarily on expansion in and to a lesser extent the. s pork production will rise for the second consecutive year as producers respond to positive returns. Additions to the sow herd and higher finished weights will both drive production during 28. Robust consumer demand for pork will also boost output in, the Philippines, and. Among major producers, only the will reduce output due to a stagnant domestic market and export sales. Global exports are forecast nearly percent higher in 28 driven by strong demand from, the Philippines, and South America (Argentina, Chile, and Colombia) where competitive prices support gains in per capita consumption. will remain the top importer, but shipments will fall for the second consecutive year due to rising domestic production. The will remain the largest exporter unchanged at 2.8 million tons but export growth is challenged by declining shipments to and an appreciating euro. U.S. production and exports: Production is expected to grow 4 percent in 28, continuing strong growth in 27. Producers have responded to robust domestic and export demand by farrowing more sows while the number of pigs per litter is at record levels. Continued production growth is expected to pressure hog prices in 28 and help spur a near 5- percent gain in exports. will remain an important market for the, aided by relatively high domestic prices. Shipments will also remain resilient to Asia, especially to Japan and the Philippines. 4. U.S. Narrows Gap but EU Remains Top Pork Exporter Million MT (CWE) (F) 28(F) Livestock and Poultry: World Markets and Trade Foreign Agricultural Service/USDA October 27

13 Pork Production - Selected Countries Summary, Metric Tons (Carcass Weight Equivalent) Oct Production 54,9 56,7 54,87 52,99 5,5 54,75 22,59 22,54 2,249 2,52 2,4 2,5,5,4,59,7,725,755 2,4 2,5 2,65 2,87 2,96, Vietnam 2,57 2,4 2,572 2,7 2,75 2,775 Canada,822,85,899,94,96 2, Philippines,88,42,46,54,585,65,284,29,2,76,4,48 Korea, South,252,2,27,266,7,2 Japan,9,264,254,279,275,27 5,889 5,72 5,56 5,49 5,42 5,55 98,25,284 99,497 98,649 99,2,882,525,68,2,2,722 2,88 8,85,652,68 9,969,4,7 Dom. Consumption 55,456 57,94 55,668 54,98 54,95 56,5 2,47 2,9 2,87 2,4 2,6 2,56,282,2,6,92,26,275 2,75 2,846 2,89 2,87 2,97 2,927 Vietnam 2,4 2,44 2,55 2,676 2,78 2,74 Japan 2,549 2,54 2,568 2,626 2,75 2,75,956,99 2,76 2,256 2,95 2,5 Korea, South,628,66,8,894,978,99 Philippines,559,6,67,74,84,99 Taiwan ,24 6,886 6,676 6,652 6,72 7,54 99,8,42,87,92,99 2,76 8,665 8,544 9,4 9,475 9,597 9,868 8,466 9,964,48 9,667,588 2,584 Note: From 25, the following countries are excluded: Albania, Armenia, Congo (Brazzaville), Gabon, Georgia, Ghana, Jamaica, North Korea, Kyrgyzstan, Moldova, Switzerland and Trinidad and Tobago. From 26, Venezuela is excluded. The notation of a month beneath a year conveys the month in which the forecast for that year was released. Foreign Agricultural Service/USDA October 27

14 Pork Trade - Selected Countries Summary, Metric Tons (Carcass Weight Equivalent) Oct Imports 77 76,29 2,8,65,6 Japan,22,2,27,6,44, ,2,25,2 Korea, South Hong Kong Philippines Australia Canada Chile , ,4 6,2 5,882 6,22 7,478 7,7 7, ,6 6,4 6,78 7,97 7,879 8,48 Exports 2,227 2,64 2,88,25 2,8 2,8 Canada,246,22,29,2,, Chile Australia Vietnam Serbia ,749 4,678 4,96 5,94 5,682 5,778 2,262 2, 2,272 2,77 2,589 2,76 7, 6,988 7,25 8,2 8,27 8,484 Note: From 25, the following countries are excluded: Albania, Armenia, Congo (Brazzaville), Gabon, Georgia, Ghana, Jamaica, North Korea, Kyrgyzstan, Moldova, Switzerland and Trinidad and Tobago. From 26, Venezuela is excluded. The notation of a month beneath a year conveys the month in which the forecast for that year was released. Foreign Agricultural Service/USDA October 27

15 Swine Stocks - Selected Countries Summary (in, head) Oct Beginning Stocks 475, , 465,8 45, 45,4 42, 46,982 46,72 48,4 48,76 47,24 47,2 8,577 8,844 9,95 9,422 9,22 8,96 8,86 9,8 9,45 2,45 2,888 22,2 Canada 2,6 2,94,8,575,76 4, 9,5 9,775 9,7 9,97,697,275 Korea, South 9,96 9,92,9,87,66,6 Japan 9,685 9,57 9,44 9, 9,46 9,7 Ukraine 7,577 7,922 7,492 7,24 6,86 6,5 Belarus 4,24,267 2,925,25,52,25 2,8 2,98 2,8 2,272 nr nr 75,976 7,66 728,6 76,22 697,528 68,7 66,224 64,775 67,776 68,99 7,525 72,25 82,2 798,46 795, ,24 769,5 755,242 Production (Pig Crop) 76,94 729, ,6 672,5 678,5 7, 257, 26,75 265, , 265,2 265, 6, 7, 9,8 4,477 42,645 4, 7,9 8,47 9,5 9,65 4, 4, Canada 27,76 27,92 28,927 28,696 29,25 29,65 7,8 7,6 8, 9,2 9,6 2,2 Korea, South 6,95 6,82 7,6 8,8 8,8 9,2 Japan 7,5 7,5 6,7 6,9 6,78 6,7 Ukraine 9,465 9,527 9,624,76 8,77 9,6 Belarus 5,25 4,85 5,2 5,2 5,295 5,85 4,77 5,22 4,92 5,28 nr nr,46,847,65,,4,79,22,779,24,86,59,5 5,5 4,856 2,4 25,96 29, 2,,26,982,279,956,26,5,248,75,254,6,29,65 Notes: The notation of a month beneath a year conveys the month in which the forecast for that year was released. nr - represents "no reporting" countries (data sets excluded beginning in 27). From 27, the following country is excluded: Australia. Foreign Agricultural Service/USDA October 27

16 Swine Trade - Selected Countries Summary (in, head) Oct Imports Canada Belarus Korea, South Ukraine Japan nr nr ,948 4,947 5,74 5,656 5,62 5,7 5,8 5,2 5,8 5,75 5,689 5,758 Exports Canada 4,784 4,96 5,776 5,67 5,65 5,725,684,77,696,552,5, Ukraine Belarus 52 5 Japan Korea, South nr nr 7,9 7,268 7,96 7,545 7,452 7, ,27 7,287 7,957 7,59 7,57 7,645 Notes: The notation of a month beneath a year conveys the month in which the forecast for that year was released. nr - represents "no reporting" countries (data sets excluded beginning in 27). From 27, the following country is excluded: Australia. Foreign Agricultural Service/USDA October 27

17 s Swine Herd Enters a New Cycle Lindsay Kuberka, Agricultural Economist Buoyed by strong returns over the past few years, Chinese hog producers entered an expansionary period during 27 which is forecast to continue during 28. The industry continues to undergo significant consolidation, hastened by new and stepped-up enforcement of environmental regulations aimed at curbing pollution from swine farms. Producers are fewer in number but larger, as producers respond to growing production costs with increased scale efficiencies. Expansion is expected to drive pork production up during 27 and 28 after 2 consecutive years of declining output. s pork imports are forecast to decline considerably over the same period, but remain far above historical levels. Environmental Regulations Hasten Industry Consolidation Chinese hog producers continue to adjust to a stricter regulatory climate at the same time that the herd emerges from a cyclical low. New standards limiting manure emissions from livestock farms have resulted in the closure of swine farms in proximity to vulnerable water supplies and urban centers. Remaining farms have been required to invest in costly manure management facilities and equipment that small-scale farms cannot easily bear. Closures have proceeded at a pace that varies across regions with a target for completion at the end of 27. While many provinces have completed closures, implementation is still underway in other provinces, including some with dense swine production. According to the Ministry of Environmental Protection, 2, farms were closed or moved during the first half of 27. However, lack of precise data on the pace and full scale of closures continues to cause considerable uncertainty over the number of farms and hogs remaining. Several meat and feed companies have announced ambitious expansion plans to fill the void left by the exit of small-scale farms. Numerous operations have been built with modern facilities and capacity to hold thousands of sows each. Agricultural authorities offer subsidies to help farms upgrade handling and treatment of manure, and for demonstration programs to utilize manure as organic fertilizer. Participants in these programs are predominantly medium- or large-scale farms. Farm closures come at the end of a cyclical contraction in hog supplies and a steep run-up in prices that began in 24. Between 2 and 27, s total swine herd declined 9 percent to 45 million head. The sow herd fell faster, declining percent during the same period. The outsized change in sows reflects the exit of mainly small, less-efficient producers who could not comply with new standards. The herd is forecast to recover modestly by the end of 28 while sows are expected to be added by the beginning of 28. Livestock and Poultry: World Markets and Trade 6 Foreign Agricultural Service/USDA October 27

18 Hog Prices Expected to Decline Through 28 Historically high prices and the entry of modern farms led to a rebound in capacity that is partially offsetting the impact of farm closures. Pork production is forecast to grow percent in 27 and 2 percent in 28. Pork production growth is supported by efficiency gains on farm. Production per sow per year (PSY) rose from an average 4.2 in 2 to 4.9 in 26, with the most efficient producers reporting PSYs of over 25, closing in on rates in the. Advancements in productivity can be attributed to improvements in genetics, animal health, and veterinary care. Besides expanding barn space, producers are also investing in technology like automatic feeding and monitoring systems which boost animal health and lower costs. These factors are expected to support growth in average carcass weights next year. Record hog prices and large profits during 26 encouraged producers to invest in new facilities and equipment. Producers reaped profits of $ per head last year and most producers will at least break even during 27, despite a substantial decline in finished hog prices. Large and verticallyintegrated companies are expanding at extraordinary rates, mostly through the adoption of contract farming arrangements (termed company plus farmer ). Integrators build farrowing facilities, but outsource grow-out to small farmers who own land and feeding barns. These farmers are provided animals and all inputs and guaranteed a minimum price for finished hogs. While the largest producers still control a minority of hog supplies, growth in this part of the sector now appears to exceed the exit of small producers, a trend which will drive hog supplies during 27 and 28. PSY is defined as the pig crop (pigs saved) divided by the number of sows at the beginning of the year (USDA-FAS- PSD). Livestock and Poultry: World Markets and Trade 7 Foreign Agricultural Service/USDA October 27

19 Production Growth Dampens Demand for Imports Imports are forecast to decline for the second consecutive year in 28 as production gains reduce demand for imported pork. Although pork production is expected to recover in 28, demand strength will support increased imports. However, imports are expected to fall short of the peak reached in 24. With production growing in most major exporting countries, declines in international pork prices will keep imports relatively competitive. The, United States, and Canada will remain the principal suppliers, competing primarily on price. With relatively strong demand for processing, imports are unlikely to retreat to past levels, maintaining as the top importer of pork. For more information, contact: Lindsay Kuberka USDA-FAS,, Global Commodity Analysis Division (22) Livestock and Poultry: World Markets and Trade 8 Foreign Agricultural Service/USDA October 27

20 Broiler Meat Global production is forecast to grow percent in 28 to 9. million tons, primarily from gains in the,, India, and the. U.S. and ian expansion is driven by higher exports while the and India are due to slow but steady growth in domestic demand. s production is forecast down 5 percent in 28 for a third year in a row. continues to be constrained by highly pathogenic avian influenza (HPAI), the limited availability of genetics, a saturated market, weak prices, and soft demand. Global exports in 28 are forecast percent higher to.4 million tons. As recovers from a slow first half of 27 following quality issues, exports are forecast almost 4 percent higher in 28. s growing exports are driven by rebounding product competitiveness and key competitors negatively impacted by avian influenza related trade restrictions. s imports are forecast up nearly 7 percent as production continues to struggle. is wellsituated to strengthen shipments to and further expand its market share. U.S. production and exports: Production is expected to rise 2 percent to a record 9. million tons in 28. Exports will rise percent to nearly.2 million tons. The is now HPAI free, as of August 27, higher production will be supported by growing domestic consumption, rising export demand from, and improved shipments to other primary markets. Livestock and Poultry: World Markets and Trade 9 Foreign Agricultural Service/USDA October 27

21 Broiler Meat Production - Selected Countries Summary, Metric Tons (Ready to Cook Equivalent) Oct Production 2,8 2,692,46 2,9,25,55,5,45,89,5,7,88,5,,4 2,,6, India,45,725,9 4,2 4,4 4,6,,26,6,7,87,9 2,97,25,75,275,4,5 Argentina 2,6 2,5 2,8 2,55 2,86 2, Thailand,5,57,7,78,9,99 Turkey,758,894,99,9,95,975 Malaysia,458,584,6,67,69,7 5,58 6,29 5,722 5,48 5,7 6,8 67,4 69,459 7,55 7,87 7,579 72,8 6,976 7,6 7,97 8,26 8,596 8,97 84,47 86,765 89,26 89,98 9,75 9,278 Dom. Consumption 9,68,29,44,8,7,2,74 2,8,267 2,44,65,95 8,829 9,7 9,9 9,24 9,252 9,42 India,445,76,892 4,96 4,97 4,597,582,78,96 4,6 4,44 4,269,54,66,84,85,96 4,5 Japan 2,29 2,228 2,2 2,86 2,425 2,425 Argentina,729,77,894,95,99,96 Malaysia,494,624,677,7,75,78 South Africa,556,572,64,665,695,765 2,4 2,84 2,5 9,857 2,27 2,669 69,2 7, 72,255 72,7 72,559 7,25,69 4,4 5,94 5, 5,576 5,88 82,892 85,54 87,49 87,68 88,5 89,9 Notes: Chicken paws are excluded. From 25, the following countries are excluded: Bahrain, Georgia, Iran, Jamaica and Moldova. From 26, Venezuela is excluded. The notation of a month beneath a year conveys the month in which the forecast for that year was released. Foreign Agricultural Service/USDA October 27

22 Broiler Meat Trade - Selected Countries Summary, Metric Tons (Ready to Cook Equivalent) Oct Imports Japan Saudi Arabia Iraq South Africa Hong Kong United Arab Emirates Cuba ,65,728,72,,59, 8,69 8,849 8,5 8,88 8,994 9, ,694 8,92 8,592 8,99 9,5 9,274 Exports,482,558,84,889 4, 4,5,8,,79,276,25,28 Thailand Turkey Ukraine Argentina Belarus Canada ,94 7,68 7,92 7,67 7,988 8,255,2, 2,867,4,9,89,275,478,259,685,79,444 Notes: Chicken paws are excluded. From 25, the following countries are excluded: Bahrain, Georgia, Iran, Jamaica and Moldova. From 26, Venezuela is excluded. The notation of a month beneath a year conveys the month in which the forecast for that year was released. Foreign Agricultural Service/USDA October 27

23 HPAI: A Negative for s Producers but a Positive for Traders Tyler Cozzens, Agricultural Economist HIGHLIGHTS: Production constrained by highly pathogenic avian influenza (HPAI), limited availability of genetics, saturated market, weak prices, and soft demand. Imports rise in 28 but remain only a small portion of consumption. the primary beneficiary of s higher imports. Constraints in Broiler Meat Markets Limit Production s production is forecast down 5 percent to million tons for 28. This follows declines in 27 and 26 of 6 and 8 percent, respectively as the country continues to struggle with recurring HPAI outbreaks. The impact on producers has varied. Some report only minor impacts, due to improved biosecurity, while others have incurred higher losses due to depopulation, closures of traditional wet markets, and soft consumer demand. Notably, the recent outbreaks of the H7N9 strain have primarily occurred in wet markets where yellow-feathered birds are predominantly sold. In an effort to curb further spread of HPAI, the Chinese government has closed poultry sections at multiple wet markets. Because consumers prefer yellow-feathered birds based on taste and texture, wet market closures have constrained a marketing channel for these birds. As the stagnant broiler market continues, demand for traditional yellow-feathered birds will remain lethargic. Livestock and Poultry: World Markets and Trade 22 Foreign Agricultural Service/USDA October 27

24 Available Genetics Shrink on Trading Partner HPAI Restrictions; Domestic Industry Develops Genetics will continue to be an issue as had typically imported its white-feathered grandparent stock from the. Through 24, the supplied nearly all of s live chicken imports. Following the U.S. HPAI outbreak in 24/5 and s subsequent restrictions, the country started sourcing genetics from France. As France later struggled with HPAI outbreaks in 26, switched to genetics from Spain, New Zealand, and Poland. Although has recently started to develop its own supplies of genetics, lingering domestic HPAI issues and restrictions coupled with continuing outbreaks globally will limit available supplies. Expands Market Share in Due to Continuing Restrictions on Competitors s 28 imports are forecast up, for the fifth year in a row, to a record 48, tons; a 7 percent increase from 27. Until 29, the was the primary supplier of broiler meat with nearly 75 percent market share. s imposition of anti-dumping and countervailing duties in 2 and HPAI restrictions in 24/5 constrained and then shut off U.S. shipments. emerged as s main supplier in 2 with less than 4 percent market share. By 26, its market share had more than doubled to nearly 9 percent and is expected to continue to dominate as HPAI-related restrictions limit shipments from other major supplies. Livestock and Poultry: World Markets and Trade 2 Foreign Agricultural Service/USDA October 27

25 For more information, contact: Tyler Cozzens USDA-FAS,, Global Commodity Analysis Division (22) Livestock and Poultry: World Markets and Trade 24 Foreign Agricultural Service/USDA October 27

26 The Livestock and Poultry: World Markets and Trade circular is designed to give a snapshot of the current situation among the major players in world beef, pork, and broiler meat trade. PSDs Excluded Beginning in Year 25: Cattle: Colombia and Venezuela. Beef: Albania, Azerbaijan, Cote d Ivoire, Georgia, Ghana, Jamaica, Senegal, and Uzbekistan. Pork: Albania, Armenia, Congo (Brazzaville), Gabon, Georgia, Ghana, Jamaica, North Korea, Kyrgyzstan, Moldova, Switzerland, and Trinidad and Tobago. Broiler Meat: Bahrain, Georgia, Iran, Jamaica, and Moldova. PSDs Excluded Beginning in Year 26: Pork: Venezuela. Broiler Meat: Venezuela. PSDs Excluded Beginning in Year 27: Live Swine: Australia. Data Revisions in PSDs for Years Prior to 26: Revisions are made based on new and/or additional information. Commodity/Attribute Years Countries Cattle Stocks NONE Beef Production Kuwait and Libya Trade Angola, Canada,, and Peru. Swine Stocks 25 Canada Pork Production 2-25 Angola, El Salvador, and Singapore Trade EU,, and Broiler Meat Production Australia, the EU, Iraq, Jordan, Kuwait, Malaysia, Oman, and Qatar. Trade NONE Assumptions Diseases: Forecast reflects disease (avian influenza, bovine spongiform encephalopathy, etc.) policies and restrictions in place as of October 2, 27 and assumes their continuation. Conversion Rates and HS Codes Beef & Veal Pork Broiler Meat Conversion Rate.4. None HS Codes Fresh/Chilled: 2 Frozen: 22 Processed: 22 & 625 Notes to Readers Fresh/Chilled: 2, 22, 29 Frozen: 22, 222, 229 Processed: 2, 22, 29, 624, 6242, 6249 Fresh/Chilled: 27, 27 Frozen: 272, 274 Processed: 622 Note: There are several exceptions by country/product. In general, chicken paws are excluded. Also, beef and veal estimates include meat of other bovines for certain countries. In particular, Indian estimates include carabeef (water buffalo). Livestock and Poultry: World Markets and Trade 25 Foreign Agricultural Service/USDA October 27

27 Technical Notes CWE/PWE: All quantities (beef and pork) noted are in Carcass Weight Equivalent (CWE) unless otherwise noted as Product Weight Equivalent (PWE). CWE is the weight of an animal after slaughter and removal of most internal organs, head, and skin. PWE is the actual weight of the meat product exported. RTC (Ready-to-Cook): The weight of poultry certified wholesome by inspection after post-mortem condemnation pounds are removed. Ready-to-cook represents poultry meat ready for the marketing channel. FAS Reports from Overseas Offices The Livestock and Poultry: World Markets and Trade circular is based on post reports submitted since July 27 and on available secondary information. The individual country reports can be obtained on FAS Online at: PSD Online The entire USDA PSD database is available online at: Additional Resources Please refer to the USDA-FAS Dairy, Livestock and Poultry website at: for additional data and analysis. Situation and outlook information on U.S. livestock and poultry can be obtained from the USDA- Economic Research Service at: Future Releases and Contact Information Please visit to view archived and future releases. The next release of this circular will be in April 28. Questions may be directed to the following staff: Lindsay Kuberka (22) Swine and Pork Tyler Cozzens (22) Poultry Ryan Bedford (22) Cattle and Beef Claire Mezoughem (22) Cross Commodity Livestock and Poultry: World Markets and Trade 26 Foreign Agricultural Service/USDA October 27