Long Term Global Meat Market Developments 7th January, 2011 AIDAN COTTER Growing the success of Irish 28 JANUARY food & horticulture 2009 CHIEF EXECUTIVE BORD BIA
Outline Recent trends in global meat market Key market drivers Potential developments to 2020
Recent trends in Global Meat Market
Per capita consumption continues to grow 100 90 80 70 60 50 40 30 20 10 0 United States Per Capita Meat Consumption (kg per head) Brazil 5m tonnes European Union-27 Saudi Arabia 2.7m tonnes 16m tonnes Mexico Russia China Japan Sub Saharan Africa 2000 2010 Source: FAO/OECD
Proportion of meat traded gradually increasing 16% 14% 12% 10% 8% 12% 10% 10% 14% 11% 9% Beef Poultry Sheepmeat 6% 4% 2% 4% 6% Pigmeat 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: FAO/OECD
Middle East, Russia & Asia driving import demand 000t 2500 2010 versus 2000 2000 1500 1000 Sheepmeat Pigmeat Beef Poultry 500 0-500 MENA Russia EU China Jp. & Kr. N America +2.3mt +0.8mt +0.4mt +0.4mt +0.6mt +0.4mt Source: FAO/OECD
America s fuelling export growth 000t 6000 2010 vs. 2000 5000 4000 3000 2000 Sheepmeat Pigmeat Beef Poultry 1000 0-1000 Sth. America Nth. America India Oceania EU +5.6mt +1.9mt +0.4mt +0.2mt -0.8mt Source: FAO/OECD
World meat prices increasing... $/tonne 4,000 3,500 3,000 2,500 Beef, Argentina, frozen cuts Pork, USA, frozen 2,000 1,500 Chicken, Brazil, export value fob 1,000 500 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: FAO
2010 saw accelerated growth in world prices % 50 45 48 40 35 30 25 2000-2010 Avg 2010 20 15 10 5 10 12 11 2 9 0 Beef, Argentina, Frozen Pork, USA, Frozen Chicken, Brazil, Frozen (fob) Source: FAO
Key Drivers of Change AIDAN COTTER Growing the success of Irish 28 JANUARY food & horticulture 2009 CHIEF EXECUTIVE BORD BIA
Billions 10 World Population 1950-2050 9 8 7 6 7 billion 8 billion 9 billion 5 4 3 4 billion 6 billion 5 billion 2 1 3 billion 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 By 2050 some 70% will live in urban areas. Almost three quarters Growing Source: the UN success World Population of Irish Prospects; food & horticulture the 2008 revision will be in Asia and Africa
The issue of Land... Availability Use
Climate Change: impact of disruptive weather and precipitation patterns on long-term agricultural output
By 2025, two-thirds of the world population could be living The scarcity of fresh water for a growing global population will result in water wars, rising prices and the requirement to declare embedded water under water stress conditions. Some 70% of the world s water is used in agriculture 70% of Growing the world s the success water of Irish food is & used horticulture in agriculture
Other issues... Volatility Feed costs and output prices Trade Policy Profitability Farm & processing level 500 450 400 350 300 250 200 150 100 50 0 US Hard Red Winter Wheat, $/tonne
Developments to 2020 AIDAN COTTER Growing the success of Irish 28 JANUARY food & horticulture 2009 CHIEF EXECUTIVE BORD BIA
Growth in meat consumption to continue M tonnes 350 314 300 276 250 227 200 150 100 Global consumption to grow by almost 40m tonnes by 2020 50 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Source: Bord Bia based on FAO/GIRA
Poultry the main beneficiary Share of meat consumption growth, 2010 2020 (%) Beef 9% Sheepmeat 3% Pigmeat 28% Poultry 60% Source: GIRA Long Term Meat Study
Asia to drive growth in demand M tonnes Growth in meat consumption, 2020 vs. 2010 (million tonnes) 14 12 10 8 6 4 2 0 China NAFTA Brazil MENA Russia EU JP & KR Others
Meat Price Prospects Source: OECD and FAO Secretariats Some rise in real terms anticipated Especially red meat due limited supply growth
Trends by meat AIDAN COTTER Growing the success of Irish 28 JANUARY food & horticulture 2009 CHIEF EXECUTIVE BORD BIA
Beef consumption to grow by 6% or 4 million tonnes Growth in beef consumption by region, 2020 Vs. 2010 (Million Tonnes) 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 China MENA USA Mexico India Japan Others Source: GIRA Long Term Meat Study
Leading to growth in import demand Growth in beef imports by region, 2020 Vs. 2010 (Million Tonnes) 0.20 0.15 0.10 0.05 0.00-0.05-0.10-0.15-0.20-0.25 USA Russia MENA Japan S Korea Other F East Others Source: GIRA Long Term Meat Study
EU Commission beef projections, 2010-2020 Assuming unchanged Trade Policy Net production to fall by 7% Fall of 7% in dairy cows Consumption to drop by 3% Imports to grow by 180,000t Exports to fall by 60,000t 700 600 500 400 300 200 100 0 EU Beef Imports, 2010 2020 ( 000t cwe) Source: EU Commission, December 2010
Beef export growth to be driven by South America Change in beef exports, 2020 Vs. 2010 (Million Tonnes) 0.4 0.3 0.2 0.1 0-0.1-0.2 Brazil Argentina Australia USA Uruguay Others Source: GIRA Long Term Meat Study
Pigmeat consumption to rise by 10% or 11m tonnes 60% of growth 7.0 6.0 5.0 4.0 3.0 2.0 1.0 Growth in pigmeat consumption by region, 2020 Vs. 2010 (Million Tonnes) 0.0 China EU-27 USA Russia Phil. Brazil Mexcio JP. & KR. Source: GIRA Long Term Meat Study
However, growth in pigmeat trade more limited Pigmeat imports by key country, 2020 Vs. 2010 (Million Tonnes) 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Overall, imports to rise by around 800,000 tonnes or 13% Japan USA Russia China & Hong Kong Source: GIRA Long Term Meat Study
Export growth to be driven by North America Pigmeat exports by key supplier, 2020 Vs. 2010 (Million Tonnes) 2.5 2.0 1.5 1.0 0.5 0.0 USA EU CAN Brazil China & Hong Kong Source: GIRA Long Term Meat Study 55% of growth from US & Canada
Poultry consumption to rise by a quarter Growth in poultry consumption by region, 2020 Vs. 2010 (Million Tonnes) 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 China MENA USA Oth. S America Source: GIRA Long Term Meat Study Brazil EU Others Consumption growth expected in all regions, strongest in China & Middle East
Growth in global poultry trade to continue Poultry imports by key country, 2020 Vs. 2010 (Million Tonnes) 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 MENA EU-27 Japan China Russia Oth. Far East Source: GIRA Long Term Meat Study Global import requirement to grow by 26% or 2.6m tonnes
Brazil & US to drive poultry export growth Poultry exports by key supplier, 2020 Vs. 2010 (Million Tonnes) 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Brazil USA Thailand EU-27 China Argentina Source: GIRA Long Term Meat Study Brazil and US account for 70% of trade
Global sheepmeat market Consumption to grow by 6% China & Middle East Production to rise by over 5% Non-traditional producers Import growth in MENA & EU Exports NZ marginally lower 0.5 0.5 0.4 0.4 0.3 0.3 0.2 0.2 0.1 0.1 Australia to grow by 12% 0.0 Sheepmeat exports by region, 2020 vs. 2010 (million tonnes) New Zealand Australia Others 2010 2020(f)
Summary Global meat consumption to rise by 40m tonnes Led by poultry & pigmeat 1/3 of growth to take place in China Higher meat prices anticipated Volatility in feed and output prices set to persist Number of positive drivers However, a number of key challenges
Long Term Global Meat Market Developments 7th January, 2011 AIDAN COTTER Growing the success of Irish 28 JANUARY food & horticulture 2009 CHIEF EXECUTIVE BORD BIA