Symposium: Muscle Growth and Development. Keynote Address: World Poultry Consumption

Transcription

1 Symposium: Muscle Growth and Development Keynote Address: World Poultry Consumption WILLIAM P. ROENIGK1 National Broiler Council, Washington, DC (Key words: world poultry consumption, broiler, per capita consumption, meat products, demographics) 1999 Poultry Science 78: WORLD MEAT CONSUMPTION World poultry meat (chicken, turkey, duck, and specialty birds) consumption is of significant economic importance in more than 50 countries worldwide. Poultry is the second most consumed meat, globally, having overtaken beef-veal in Pork is the leading world meat. Poultry, however, is clearly the most dynamic in terms of gaining market share; adapting technology for breeding, feeding, production, processing, and marketing; and being in position to benefit from major consumer food trends. This dynamic approach by poultry producers and marketers provides a sound basis for concluding that poultry will overtake pork consumption sometime in the future. Overtaking pork represents a formidable challenge, and although it may be a decade or more before poultry becomes number one worldwide, the fundamental data support such a lofty forecast. Consider the data (Table 1): Of the 47.5 million metric ton increase of total meat (poultry, pork, and beef/veal) expected between 1988 to 1990 and 1998 to 2000, more than one-half will likely be poultry. For the first decade of the new century, this trend toward an increased market share for poultry will likely continue. WORLD BROILER CONSUMPTION Received for publication August 1, Accepted for publication October 6, To whom correspondence should be addressed: ChickenUSA.org WRoenigk@ World broiler consumption in 1998 is expected to reach 37.0 million metric tons, 55% more than 23.9 million tons consumed in Between 1988 and 1998, the average annual rate of increase in broiler consumption was 4.7%. In 1998, the top 15 broiler consuming countries accounted for more than 96% of total world broiler consumption, whereas in 1988, the top 15 countries consumed 90%. China is a major reason why broiler consumption is becoming more concentrated in the top 15 countries. In 1988, China s consumption of broilers represented less than 8% of total world broiler consumption. This year, however, China is expected to consume almost 6.4 million tons of broilers or over 17% of total world broiler consumption more than double its share in Broiler consumption in most of the top 15 countries has sustained significant growth between 1988 and Countries sustaining the greatest relative increase in broiler consumption between 1988 and 1998 are presented in Tables 2 and 3 and Figure 1. WORLD POULTRY CONSUMPTION World poultry meat consumption consists of three major segments: young meat chickens (broilers), turkeys, and other poultry, which includes spent table egg layers, spent breeder hens/males, ducks, geese, guinea-fowl, pheasants, quail, squab, and ratites (ostriches, emus, etc.). Broilers clearly dominate the world poultry consumption picture, contributing about 70% to the world poultry market. Turkeys account for about 8% and other poultry provides the balance (22%) of global poultry marketings. World poultry consumption at an estimated 53.0 million metric tons in 1998 will be 78% above the 29.7 million tons consumed in Countries experiencing the greatest relative increase in poultry meat consumption between 1988 and 1998 are presented in Table 4. A very interesting and significant point is obvious when the world poultry consumption data are analyzed. In 1998, the U.S. will no longer be the world s largest consumer of poultry meat. This year, China is expected to eat over 12.9 million tons of poultry, whereas the U.S. should consume 12.8 million tons. This analyst agrees with most other analysts who have looked at world poultry consumption trends; China s position as the leading consumer of poultry meat will not only continue in the years ahead but the gap between Number 1 (China) and Number 2 (U.S.) will widen. One basic reason for this conclusion is that Chinese consumption of poultry is less than one-fourth the level in the U.S. when measured on an average per capita consumption weight basis. The bottom line is that the potential for incremental growth in poultry consumption is much greater in China than in the U.S. For the world to be able to consume 53.0 million tons of poultry meat, on a dressed-carcass weight basis, more 722

2 *Estimated by author. SYMPOSIUM: MUSCLE GROWTH AND DEVELOPMENT 723 TABLE 1. World consumption of poultry, pork, and beef-veal Increase from to Meat Share * Share (million metric tons) (%) (million metric tons) (%) Poultry Pork Beef-veal Total than 70.0 million pounds of poultry, on a liveweight basis, are required to be produced. Assuming 2.5 kg of mixed feed are needed to produce 1.0 kg of live poultry, world poultry producers this year will feed more than 175 million tons of feed. By comparison, it can be noted that the 175 million tons of feed represent almost threefourths of the expected U.S. corn harvest of about 240 million tons in the fall of Data for world consumption are presented in Table 5 and Figure 2. Between 1988 and 1998 the average annual rate of increase in poultry consumption was 6.0%. PER CAPITA POULTRY MEAT CONSUMPTION Average per capita poultry meat consumption varies widely among countries. Although the variations from country-to-country are significant, the trend for poultry meat consumption in most countries is upward. Israel, when measured on an average per capita consumption basis, is the top world consumer of poultry meat. The U.S. is a relatively close second, although it should be noted the U.S. consumption is measured on a retail weight basis rather than a carcass weight basis, which is the method used in most countries. In addition to presenting average per capita consumption data for the top nineteen poultry consuming countries, data for Russia, China, and India are presented in Table 6. Russia presents an interesting TABLE 2. Percentage increase in broiler meat consumption for the top 15 broiler consuming countries 1 Increase Country from 1988 to 1998 (%) China 242 Brazil 129 Argentine 112 Mexico 103 Thailand 80 United States 53 Republic of South Africa 51 Saudi Arabia 48 Egypt 42 Canada 41 Australia 30 European Union 26 1Calculated from data presented in Table 3. situation and is of particular concern to the U.S. poultry industry. Despite the tremendous political and economic changes, Russia s poultry consumption has remained somewhat stable because poultry meat imports have replaced the loss in domestic Russian production of poultry. Well over two-thirds of the poultry consumed in Russia is now imported and the outlook for the foreseeable future is that Russia will need to continue to rely upon imports if it wants to sustain current consumption levels. Much of the Russian imports, about three-fourths, are from the U.S., with chicken leg quarters providing the bulk of the product being sold. Looking at the Russian poultry meat import situation from the U.S. standpoint, almost one-half the chicken exported by the U.S. goes to Russia when adjustments for trans-shipments through Russian-neighboring countries are taken into account. The U.S. poultry exporters who realize the great reliance on Russia, I am sure, are fully aware of the old business adage of having too many eggs in one basket. Average per person poultry meat consumption information is not readily available for certain countries for 1988 through Nonetheless, it is apparent that a number of countries have dramatically increased their level of poultry meat consumption when measured on a per capita basis. China once again demonstrates the greatest gain, with per capita consumption now more than fourfold the level in Brazilian consumption doubled from 1988 to 24.4 kg expected this year. Data for world per capita poultry meat consumption are presented in Table 6. The top 19 countries are presented in descending order of consumption; Russia, China (PRC) and India are presented for informational reasons. DRIVERS MOVING WORLD POULTRY CONSUMPTION Converging parameters driving poultry consumption around the world are as follows: 1) population growth and demographic developments; 2) economic growth generating increasing disposable income that is especially beneficial for income-elastic foods, such as animalbased proteins; 3) price or cost of poultry relative to competing foods, especially pork, beef, fish, and seafood; 4) nutrition/healthfulness concerns and preferences; 5) product development that meets market chain

3 724 ROENIGK *Preliminary. **Estimated. TABLE 3. World broiler consumption Country/Area * 1998** (1,00 metric tons) United States 6,909 7,444 7,832 8,288 8,776 9,100 9,385 9,449 9,809 10,162 10,600 China (PRC) 1,868 1,466 1,749 2,060 2,343 2,929 3,833 4,940 5,790 6,185 6,390 European Union 4,037 4,153 4,249 4,441 4,508 4,475 4,693 4,698 4,978 5,003 5,089 Brazil 1,711 1,840 2,056 2,306 2,494 2,726 2,930 3,626 3,483 3,806 3,920 Mexico ,233 1,415 1,451 1,485 1,529 1,581 1,633 1,740 Japan 1,607 1,626 1,632 1,630 1,637 1,622 1,601 1,674 1,665 1,620 1,610 Russia 1,242 1,289 1,255 1, ,138 1,227 1,349 1,449 Canada Republic of South Africa Argentine Thailand Saudi Arabia Australia Venezuela Egypt Total of 15 21,479 21,774 22,804 24,467 25,789 26,938 29,019 31,466 33,026 34,462 35,669 Other Countries 2,421 2,426 2,536 2,233 1,711 1,313 1,303 1,294 1,355 1,342 1,332 Total World 23,900 24,200 25,340 26,700 27,500 28,251 30,322 32,760 34,381 35,804 37,001 requirements and end-consumer desires; and 6) other factors. Population Growth/Demographic Developments Population growth and increases in individual incomes are clearly the two most important factors driving future demand for poultry. Where the population growth occurs and the propensity for the population to prefer poultry in their diet is also critical. Currently world population growth is 1.5%/yr. Almost six billion people now inhabit our world. A 1.5% growth rate is equal to an additional 90 million consumers, or another Mexico, added to the world s population each year. Having noted the growth rate of 1.5%, however, it is also important to explain that population growth rates and fertility rates are declining in nearly all regions of the world. Fertility remains high, however, in Africa, the South Asian subcontinent, and the Caribbean. These areas of above average population potentially tend to have preference for poultry meat. From a demographics perspective it is reasonable to conclude that the areas of the world where the population will likely increase above average are also the areas that offer the greatest potential for increased poultry consumption. India, for example, is expected to surpass China in the next quarter-century as the country with the largest population. Even though India currently has a relatively low average per capita consumption level of poultry, the power of numbers can make India very important in the future. they are in many parts of the world, poultry is often consumed in place of grain-based products. Although there is a substitution effect, it is not a one-for-one tradeoff. Most often, animal protein products are added to the consumers diets of grain-based products. The result is more total protein and calories are consumed. In high income countries the effect of an increase in income on poultry consumption becomes marginal. In these countries certain European Union countries are examples demand is directed more toward upscale, value-added, processed poultry products, rather than consumers adding more and more pounds of poultry to their diet. In a recent USDA Publication (USDA, 1997) that analyzed the outlook for world meat consumption and trade, a positive picture was presented. This report Increased Disposal Incomes Demand for poultry has a high income elasticity, especially in developing countries. As incomes rise, as FIGURE 1. Note: 1997 is preliminary and 1998 is estimated. Source: USDA s Foreign Agricultural Service.

4 SYMPOSIUM: MUSCLE GROWTH AND DEVELOPMENT 725 TABLE 4. Percentage increase in global consumption of all poultry meats Increase Country/Area From 1988 to 1998 (%) China 383 India 171 Turkey 157 Brazil 128 Mexico 105 Argentina 98 Thailand 88 Republic of South Africa 79 Taiwan 68 Canada 45 United States 44 Saudi Arabia 39 European Union 33 presented a good summary of the world economic situation and its effect on the poultry market. The generally favorable world economic outlook for the upcoming decade, especially the prospects for stronger income gains in emerging markets, is expected to spur further growth in meat demand and trade. World meat consumption is likely to grow faster than the four percent growth witnessed over the past decade, buoyed by increasing demand from many emerging economies in Asia. Economic disruptions in many of these countries due to currency devaluations are likely to be resolved over the next few years. The prospects for expanding meat trade are favorable as the trend towards industry concentration continues and as changing dietary preferences in developing countries sustains growing demand for meat products. Another impetus for trade is likely to originate from already negotiated reductions in trade barriers, primarily in East Asia. However, trade gains are not expected to match the robust seven percent growth witnessed over the past decade, rather they are likely to slow to a more sedate five percent annual rate of gain. The shift in the composition of meat trade favoring poultry meat is likely to continue in the future, supported by lower poultry meat prices relative to other meat. Lower relative poultry meat prices stem not only from poultry s low production costs compared with most other meats but also from the growth in low priced poultry parts, particularly dark meat. This allows exporters like the United States, were white meat sells at a premium in the domestic market, to ship parts at prices lower than those of a whole bird. Much of the outlook for the world meat complex hinges on developments in China. Nearly three quarters of the gains in global meat consumption since 1988 has been driven by market reforms in China. The Chinese have been avidly increasing their consumption of meat since the late 1980 s and most of their increased demand has been met by growing production of both pork and poultry meat. The ability of China and other emerging markets to increase production to satisfying growing consumer demands for meat products will dictate the pace of growth for world trade. As trade barriers are negotiated down, a country s competitive position in *Preliminary. **Estimated. TABLE 5. World poultry consumption Country/Area * 1998** (1,000 metric tons) China (PRC) 2,676 2,795 3,187 3,959 4,556 5,800 7,642 9,582 11,186 11,965 12,920 United States 8,907 9,523 10,848 10,556 11,065 11,384 11,683 11,766 12,138 12,363 12,805 European Union 5,751 5,973 6,201 6,362 6,579 6,592 6,829 6,993 7,389 7,494 7,657 Brazil 1,757 1,891 2,111 2,364 2,542 2,782 3,000 3,705 3,562 3,892 4,012 Mexico ,026 1,313 1,507 1,582 1,660 1,717 1,789 1,851 1,962 Russia 2,200 2,200 2,194 1,866 1,517 1,486 1,588 1,749 1,740 1,844 1,896 Japan 1,743 1,763 1,761 1,765 1,752 1,750 1,725 1,798 1,796 1,740 1,730 Canada ,021 Republic of South Africa ,015 Thailand Argentina Taiwan Saudi Arabia India Turkey Total of 15 27,379 28,546 30,934 32,188 33,915 36,013 39,039 42,564 45,126 47,016 49,069 Other Countries 2,321 2,254 1,966 3,312 3,785 3,415 3,489 3,594 3,711 3,815 3,897 Total World 29,700 30,800 32,900 35,500 37,700 39,428 42,528 46,158 48,837 50,831 52,966

5 726 ROENIGK FIGURE 2. Note: 1997 is preliminary and 1998 is estimated. Source: USDA s Foreign Agricultural Service. the world meat complex hinges on its supply of raw materials, particularly grain and protein materials, as well as technical efficiencies and environmental pressures. The ability to quickly expand modern poultry production facilities, and incorporate improved genetics, imply that the growth in poultry production and consumption will exceed those of beef and pork. However, environmental concerns, limited feed grain availability, and land limitations may limit production expansion in those areas unable to resolve these constraints. Continued strong demand from Asian markets, such as Japan and South Korea, stemming from ongoing market liberalization, will boost import demand for both pork and beef. The United States will be the major beneficiary of stronger demand for quality grain fed beef. Income gains in China and Mexico will serve as a major catalyst to maintaining strong demand for imported poultry meat. Resolution of trade restrictions in the form of health and sanitary regulations not based on sound science would also provide additional impetus to poultry trade. Overall exports of meat products are likely to reach nearly 17 million tons by 2005 with poultry meat expected to account for nearly two-thirds of the gains. The United States as one of the most efficient, low-cost producers and exporters of meat products is likely to benefit from increased trade facilitated by constrained production potential in other countries. Annual economic growth in the range of 6 to 7% for developing countries is considered good and provides significantly higher incomes for consumers. This level of healthy economic expansion can provide a sound basis for achieving the future increase of world poultry consumption presented in this report. It is interesting to note that China s economic growth target this year is 8%, but actually will be about 7%, as the Asian economic problems pressure the Chinese economy. Most other Asian countries will be fortunate to achieve 2 to 3% economic growth this year. Next year economic growth rates for certain *Preliminary. **Estimated. TABLE 6. World per capita poultry meat consumption Country/Area * 1998** (kg per person) Israel United States Canada Singapore Saudi Arabia Taiwan Australia United Kingdom Ireland Spain Portugal France Brazil Republic of South Africa Greece Netherlands Argentina Mexico Italy Russia China (PRC) India

6 Asian countries should begin to return to levels approaching 7%. SYMPOSIUM: MUSCLE GROWTH AND DEVELOPMENT 727 Price or Cost of Poultry Paramount in the cost of producing poultry is the cost of feed grains, oil seeds, and other primary feed ingredients. An optimistic picture for the future production of feedgrains at favorable prices to poultry producers can be supported if breakthroughs in agricultural biotechnology are assumed. Scientists working in biotechnology expect a coming sea change in how crops will be produced. Success in adding new traits that improve the feeding quality of grains are still in the infancy stage. Although there is a certain consumer resistance in Europe to genetically modified grains or oil seeds, this genetic engineering will be much more broadly accepted and embraced when consumers realize these foods can benefit their health, are more environmentally friendly, add improved convenience, and enhance food safety. Customized corn that better meets the nutritional profile needs of poultry is already an established practice. In 1997, 34 million acres were planted with genetically modified crops and this year about 84 million acres were planted. By the year 2000, experts predict more than 150 million acres will be under cultivation with a biotech seed. An estimated 30% of North American planted soybeans this year are roundup ready. Nearly 10% of North American corn in 1998 is roundup ready or liberty link resistant. Biotech corn accounts for another 10% of the 1998 corn acreage. Although much development has already occurred to support the thinking that crop yields will increase to feed the expanding world consumption of poultry and red meat, much more will have to happen for users of feed grains or oil seeds to be able to secure needed feed ingredients at favorable costs. On the other hand, the past 30 yr of global yield trends for crops and measures of livestock feeding efficiency provide a less than optimistic picture. Relying upon the technology of the previous three decades will not allow animal agriculture to continue business as usual in the next decade or two. Dr. Luther Tweeten (1997) has asked the question, Was Malthus Half Right? He notes that net global area in crops has remained quite stable since 1960 and is not very sensitive to price. Past grain supply trends according to Tweeten have the following notable characteristics: 1) almost all production expansion has been from yields in recent decades global areas in cereals was essentially the same in 1996 as in 1961; 2) from 1961 to 1996, global cereal yields expanded around the straight line predicted by Thomas Malthus (Figure 3). The rate of gain averaged 44 kg/h per yr; 3) clusters are apparent of approximately 5 yr of flat yields followed by a sizable yield gain; 4) the linear yield line implies declining percentage rates of yield growth. For example, the 3.2% trend of growth rate for grain yield in 1961 fell by half to 1.6% in If global population continues to grow at the 1.7% annual trend rate of 1991, the portents for world food security would be onerous indeed. FIGURE 3. World yield for all cereals, Tweeten explains that yield trend lines for other, nongrain crops are also linear. In fact, he notes that yield percentage gains for these other crops are lower than for grains. Percentage rates of yield increase are slowing like grain yields, but the rates of gain for these other, nongrain crops were not halved between 1961 and 1990, as there were for grain. Data comparable to those for crops are not available for livestock and livestock products. Tweeten explains, however, livestock offers only limited opportunities to expand productivity of agriculture, he adds. Global yield trends for crops and measures of livestock feeding efficiency provide a sobering picture for consumers. The hypothesis cannot be rejected that global yield trends from 1961 to 1996 are linear. Given that crop area is unlikely to expand without higher real prices for farm food ingredients, can the disappointing yield trends expand supply enough to meet the growing demand for food without higher real commodity prices is the major concluding question Tweeten asks. Before leaving the discussion regarding future grain production, it is important to note a few points about China. Clearly, this country is and will continue to be pivotal in the supply/demand situation for grains in the future. China s food situation is considered a national security issue by the U.S. government. Toward a better understanding of this situation, a new study has recently been completed by an interagency task force using CIA satellite technology and USDA China specialists. The study reaffirms recent theories that actual farmland in cultivation could be nearly 50% higher than official statistics (340 million acres vs previous estimates of 230 million acres). As production estimates are believed to be accurate, this revision in estimate implies that yields are much lower than previously thought. This situation suggests even greater potential demand for improved crop inputs including seed and fertilizer from China over the long term. The study also highlights the continued challenges China will have in feeding itself including the loss of farmland to urbanization and industrialization. Of even greater interest was the evaluation of China s increasing water scarcity, which indicated that existing resources

7 728 barely sustain the competing agricultural and urban demands, and continued population growth and urbanization will only exacerbate the problem. Lester Brown, president of Worldwatch, in 1995 wrote the book Who Will Feed China? In his book he explained that if China cannot sustain itself from an ecological standpoint, it is potentially politically unstable. His most recent publication is called Vital Signs (Brown, 19XX) and he further discusses his conclusions about China. Brown noted that whereas China may have vastly more arable land than previously thought, the limiting factor to producing more grain will be the scarcity of water. Brown sees the Chinese consumer switching from rice and pork to products that are more water-thrifty, such as chicken and wheat. The next few years should begin to truly measure the problem of limited water supplies in China. ROENIGK Other Factors Although other factors can be identified or are somewhat known, the likelihood of any of them occurring or estimating their impact on poultry consumption is difficult. Not necessarily in order of importance, other factors that could negatively impact poultry consumption are consumers becoming alarmed about the food safety of poultry, such as the Hong Kong bird influenza; concern about certain pathogens; genetically modified feeds or the bird itself; a wave of vegetarianism coupled with the animal rights movement; international trade agreements or disagreements that result in significantly reduced free trade of poultry or feed grains; political upheavals; and other developments that could surprise us all. Nutrition and Healthfulness Concerns and Preferences As consumers gain higher incomes and their expenditures for food become a smaller and smaller part of their overall budget, they become much more selective about the food they consume. With the ability to select from an ever widening variety of foods, consumers seek the types of foods that enhance their lifestyles. With higher incomes, food is not viewed as a necessity of life but rather a means to more fully enjoy life and at the same time a means to enhance an individual s lifestyle. In most, if not all, developed countries consumers are increasingly seeking foods that improve their health, are viewed as more wholesome, and can lead to a longer life. Poultry meat, fortunately, is viewed in most developed countries as having attributes that blend and mesh with consumers preferences. In the U.S. breast meat is considered nutritional superior to leg meat. This view now appears to be spreading from North America to certain other developed countries. Poultry marketers recognize the power of the healthfulness factor and successful marketers continue to build upon it. Product Development In my lifetime the marketing form of chicken has moved from a single product, that is only New York- or city-dressed poultry was available, to the current market environment where one major chicken company offers chicken in over 3,000 products and forms. Many of these products are unique to chicken; however, other products clearly are close substitutes for rival red meat products. For poultry consumption to continue to expand both in developed countries and developing countries a variety of products will need to be offered to consumers. Although product forms and concepts can easily be transferred to other countries, the challenge is to adapt new products to meet the unique requirements of the consumers in a given country. Poultry marketers in most parts of the world should be given credit for a good job in developing and successfully marketing new products. CONCLUSION World poultry consumption has been on an upward trend for many years and will undoubtedly continue in an upward trend. Poultry is poised to become the world s choice in meat in the next decade or two. There are many challenges, some known, some unknown at this time, that can change that favorable trend in poultry consumption. At the same time there are even more opportunities, some known, some unknown, that can enhance the upward trend or at least reinforce the trend. Too often in presentations that discuss the future of some aspect of agriculture, an alarmist viewpoint is declared or a call to action is sounded. I, however, do not see a day of reckoning for world poultry nor are we at a critical decision point or crossroads. Rather, I believe what we have is a product that consumers around the world prefer and we have the technology to provide that product in ever increasing quantities. Most importantly, I believe we have dedicated people in poultry production, processing, marketing supported by dedicated, outstanding scientists and researchers. Poultry around the world will be where the action is in the years and decades ahead. I think we all look forward to being part of that exciting action. REFERENCES Brown, L., Who Will Feed China. Worldwatch Institute, Washington, DC. Brown, L., Vital Signs. Worldwatch Institute, Washington, DC. Tweeten, L., Agricultural Policy at the end of the 20th Century. Executive Summary of the 1997 National Public Policy Education Conference. Farm Foundation. Farm Foundation, Oak Brook, IL. USDA, Livestock and poultry: world markets and trade. Circular series FL&P2-97. October Foreign Agricultural Service. USDA, Washington, DC. USDA, The Global Meat Complex: Trends and Implications. World Market and Trade. Foreign Agriculture Service, USDA, Washington, DC.