Global meat production, drivers and challenges Global Forum agri benchmark Beef and Sheep Conference 2013 Claus Deblitz Thünen Institute of Farm Economics York 19.06.2013 Claus Deblitz
Contents 1. The project behind 2. Global figures 3. Drivers 4. Challenges Page 2 Claus Deblitz
The project behind Claus Deblitz
agri benchmark understanding agriculture worldwide Page 4 19.06.2013 Claus Deblitz Global meat production, drivers and challenges
Why global farm-level benchmarking? We are all directly or indirectly linked via markets and product flows Decision making is done by millions of producers every day It needs an approach in close cooperation with producers On global scale there is a lack of comparable farm data Collecting and comparing this data and information assists in Understanding agriculture worldwide Know where you are Learn why you are where you are Conclude what can be changed to develop Page 5 19.06.2013 Claus Deblitz Global meat production, drivers and challenges
agri benchmark at a glance Main supporting partner Network Coordination Clients Analysis and projects Product branches Conferences Knowhow Data Capacity building Page 6 19.06.2013 Claus Deblitz Global meat production, drivers and challenges
Branches in the agri benchmark Network Cash Crop Beef and Sheep Pig and Poultry Dairy (EDF) Horticulture Organic Cereals Oilseeds Sugar Other Cow-calf Finishing Ewes Finishing Under construction Sows Finishing Under construction Under construction Apple Grapes Under construction Wheat Potatoes Milk Cow-calf Coffee Bananas Page 7 19.06.2013 Claus Deblitz Global meat production, drivers and challenges
Countries in the agri benchmark Network 2013 Countries Farms Cow-calf 23 55 New countries 2013 Ireland (beef/sheep) Uruguay (beef/sheep) China (sheep) Beef finishing 29 70 Sheep 14 25 Participating countries 2013 Contacts for further growth Page 8 19.06.2013 Claus Deblitz Global meat production, drivers and challenges
Research partners of the Beef and Sheep Network Page 9 19.06.2013 Claus Deblitz Global meat production, drivers and challenges
Typical farms the principle Imagine you have a guest from a foreign country who is interested to see how sheep farming is done in your country. You would want to show your guest a farm that is located in an important sheep producing region, using the common technology for sheep production, running the prevailing production system, having a not too small and not too big size, using the prevailing combination of labour, land and capital. In other words, you want to show your guest a typical farm! Page 10 19.06.2013 Claus Deblitz Global meat production, drivers and challenges
Global figures 380 214 200 159 328 384 303 14 6 448 194 Claus Deblitz
The world s top beef producers 2011 ('000 tons) USA 11,990 Page 12 Claus Deblitz Source: FAOStat 2013
Brazil and China were the growth promotors for beef Average 2009-2011 vs. 2000-2002 ('000 tons) China 1,370 Brazil 2,330 Page 13 Claus Deblitz Source: FAOStat 2013
China dominates sheep production 2011 ('000 tons) USA 11,988 China 2,050 Source: FAOStat 2013 Page 14 Claus Deblitz
Sheep production developments diverse Average 2009-2011 vs. 2000-2002 ('000 tons) Iran -235 China 496 2.333 Source: FAOStat 2013 Page 15 Claus Deblitz
China dominates (!) pig production 2011 ('000 tons) China 51,530 Page 16 Claus Deblitz Source: FAOStat 2013
China, USA and Vietnam with biggest growth in pig Average 2009-2011 vs. 2000-2002 ('000 tons) China 9,460 2.333 Page 17 Claus Deblitz Source: FAOStat 2013
USA, China, Brazil lead chicken production 2011 ('000 tons) USA 17,110 China 12,080 Brazil 11,000 Page 18 Claus Deblitz Source: FAOStat 2013
.. and they also lead chicken expansion Average 2009-2011 vs. 2000-2002 ('000 tons) USA 2,580 China 2,905 Brazil 2.333 4,130 Source: FAOStat 2013 Page 19 Claus Deblitz
Winners and losers in beef trade Average 2010-2012 vs. average 2000-2002 Beef imports ('000 tons) Beef exports ('000 tons) Source: FPD/FAS/USDA United States Mexico Japan EU-27 Canada Taiwan South Korea Chile Egypt Algeria Saudi Arabia Hong Kong Venezuela Iran Russia EU-27 Canada Ukraine Argentina New Zealand Australia United States Nicaragua Belarus Uruguay Mexico Paraguay Brazil India -500-300 -100 100 300 500-500 0 500 1000 Page 20 Claus Deblitz
Winners and losers in sheep trade Average 2010-2012 vs. average 2000-2002 Sheep imports ('000 tons) Sheep exports ('000 tons) Source:: GTIS France Australia Greece Ireland United Kingdom New Zealand Japan Bulgaria Germany Portugal Belgium Belgium Argentina New Zealand Spain Sweden United States United States Uruguay Russia Netherlands Netherlands China United Kingdom -50 0 50 100-20 0 20 40 Page 21 Claus Deblitz
Winners and losers in pig trade Average 2010-2012 vs. average 2000-2002 Pig imports ('000 tons) United States Philippines Canada Australia Hong Kong Ukraine Japan South Korea Mexico Russia China Pig exports ('000 tons) South Korea Australia Norway Ukraine Mexico China Belarus Chile Brazil Canada EU-27 United States Source: FPD/FAS/USDA -200 0 200 400 600-200 300 800 1300 Page 22 Claus Deblitz
Winners and losers in chicken trade Average 2010-2012 vs. average 2000-2002 Chicken imports ('000 tons) Russia China Argentina Japan Hong Kong Kazakhstan Angola Venezuela South Africa Mexico Saudi Arabia EU-27 Iraq Chicken exports ('000 tons) China Ukraine Belarus Canada Chile Thailand Turkey Argentina EU-27 United States Brazil Source: FPD/FAS/USDA -600-400 -200 0 200 400 600-500 0 500 1000 1500 2000 2500 Page 23 Claus Deblitz
Drivers Claus Deblitz
Fundamentals basically unchanged meets supply Natural conditions, natural disasters, climate change Framework conditions: policy, economic, technology Production, productivity Growing demand Population growth Income growth Changing eating habits and results in price developments basically pointing upwards Page 25 Claus Deblitz Source: www.globalmeat news.com
After years of decline meat prices point upwards (Index 2002 = 100) 01.01.90 01.01.91 01.01.92 01.01.93 01.01.94 01.01.95 01.01.96 01.01.97 01.01.98 01.01.99 01.01.00 01.01.01 01.01.02 01.01.03 01.01.04 01.01.05 01.01.06 01.01.07 01.01.08 01.01.09 01.01.10 01.01.11 01.01.12 01.01.13 240 220 200 180 160 140 120 100 80 60 40 Meat Price Index Poultry Meat Pig Meat Bovine Meat Ovine Meat Source: Own calculations based on FAO 2013 Page 26 Claus Deblitz
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 Beef prices upwards 1997-2012 (Index 2000 = 100) Index well above 200 in 2012 (USD) 600 500 400 300 200 100 Argentina Australia Brazil China Indonesia South Africa Ukraine Poland Index around/less than 200 in 2012 (USD) 600 500 400 300 200 100 Austria Canada Colombia France Germany Italy Spain UK USA Ireland 0 0 Source: agri benchmark, based on national statistics Page 27 Claus Deblitz
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12... and livestock prices too (Index 2000 = 100) Index well above/around 200 in 2012 (USD) 600 500 400 300 200 100 Argentina Australia Brazil Kazakhstan Indonesia South Africa Ukraine Poland Index around/less than 200 in 2012 (USD) 600 500 400 300 200 100 Austria Canada Colombia France Germany Italy Spain UK USA Ireland 0 0 Source: agri benchmark, based on national statistics Page 28 Claus Deblitz
Cost developments 2005-2012 (USD and %) USD per 100 kg carcass weight 900 800 700 600 500 400 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012 Page 29 Claus Deblitz Austria Germany Spain Italy UK Poland USA Argentina Argentina Brazil China Australia South Africa Increases in percent 20 % 70 % 50 % 80-120 % 100 % 150 % 30 % 20 %
AT-30 DE-1100 FR-80 ES-150 UK-105 CZ-420 UA-295 US-160B MX-120 BR-1070 CN-2 ID-4 AU-600 ZA-250 Cow-calf: margins mainly driven by weaner prices USD per 100 kg live weight 800 700 600 500 400 300 200 100 0-100 -200 Margin over cash costs Weaner price Page 30 Claus Deblitz
4 beef production systems Feed % in dry matter Management/ Housing Extent of purchase feed Pasture > 30% pasture Outdoor year round or part of the year Low Silage > 30% silage and other forages Closed or semiopen barns with slatted floors and/or straw bedding Medium Feedlot > 50% grains and other energy feed Confined, large, open pens, partially with sun-covers High Cut & Carry > 30% freshly cut grass & other vegetation Mix of pens and grazing of paths and paddies Low Page 31 Claus Deblitz
Feedlots: low margins depend heavily on animal purchase and feed costs (2005-2012) USD per 100 kg carcass weight 1000 Returns Margin 800 Animal purchase 600 Feed costs 400 200 0-200 ES- 5500 IT- 2880T US- 7200 AR- 26K BR- 1550 CN- 940 ZA- 75K Page 32 Claus Deblitz
Pasture farms (2005-2012): Margin depends mainly on beef price, animal purchase and land USD per 100 kg carcass weight 500 400 300 200 100 0-100 -200 AR-750 BR-340 BR-600B AU-540 Returns Margin Animal purchase Feed costs Land costs Page 33 Claus Deblitz
Silage farms (2005-2012): mixed drivers USD per 100 kg carcass weight 600 Mix Price Price and feed 500 400 300 200 Returns Margin Animal purchase Feed costs 100 0-100 AT-120 DE-280 FR-70 UK-90 PL-30 Page 34 Claus Deblitz
DE-600 DE-1200 ES-800 ES-930 ES-1500 FR-470 FR-860 UK-400 UK-500-UL UK-500-LL MX-300 UY-600 CN-270 CN-340 AU-1250 AU-2000 AU-3000 NZ-3200 DZ-300 MA-300 NA-2400 TN-40 ZA-850 ZA-1500 Sheep receipts: a wide variation USD per 100 kg live weight 900 800 700 600 500 Other returns Government payments Wool and skin market receipts Weaned lamb receipts Breeding livestock receipts Slaughter animals receipts Cull receipts Europe Asia Oceania Africa 400 300 Americas 200 100 0 Page 35 Claus Deblitz
DE-600 DE-1200 ES-800 ES-930 ES-1500 FR-470 FR-860 UK-400 UK-500-UL UK-500-LL MX-300 UY-600 CN-270 CN-340 AU-1250 AU-2000 AU-3000 NZ-3200 DZ-300 MA-300 TN-40 NA-2400 ZA-850 ZA-1500 Sheep profitability: not everywhere bad USD per 100 kg live weight 900 800 700 600 Europe Opportunity costs Depreciation Cash costs Total returns Asia Oceania Africa 500 400 300 Americas 200 100 0 Page 36 Claus Deblitz
Challenges Claus Deblitz
Challenges (or drivers?) Diseases (Bird Flu, FMD, Schmallenberg, Blue Tongue) Technical barriers (growth promoters, ractopamine) Food safety and scandals (horse meat, E-coli, antibiotics ) Animal welfare and related regulations (sow housing, castration of piglets, cage egg production ) Environmental restrictions on production (license to produce) Exchange rates Health issues attributed to meat consumption Increasing vegetarianism (coming from low level) Page 38 Claus Deblitz
The particular challenge for beef Land requirement Beef Sheep Pig Chicken Feed conversion 6-8 2.5-3.1 1.7-2.3 Cycles per year 0.3 (pasture) 1-1.5 3 10-11 0.7-1 (silage) 2-3 (feedlot) Emissions Herbivores Can use (marginal) grasslands Granivores Need grains animal high medium low low manure medium low high medium feed low-medium low-medium depends on N used for grains sequestration not clear not clear low low Convenience (prepare) low low-medium medium-high high Page 39 Claus Deblitz
BR-600B AU-150 BR-140 CO-350 AR-380 AR-750 AU-85 UK-80 Increasing performance in the pasture system 1000 900 800 700 600 500 400 300 200 100 0 Daily weight gain (g/day) Finishing period (days) Page 40 Claus Deblitz
Bridging the gap between top and bottom 25 Multi-stakeholder approach coordinated by FAO/AGAL Gov ts, NGOs, industry, research, FAO Three focus areas: 1. Closing ( reducing ) the efficiency gap (agri benchmark / Ernesto Reyes chairs this Focus area) 2. Restoring value to grassland (overgrazing, desertification ) 3. From waste to worth (manure, water, nutrient, environment) Page 41 Claus Deblitz
Increasing productivity in the pasture system More calves per cow Genetics Reproduction management Reduction of mortality/disease Improved pasture management Subdivision / fencing Rotational grazing Fertilisation New pasture varieties >> more cows and calves per ha >> higher weight gains >> more weight per ha Page 42 Claus Deblitz
Moving finishing from pasture to feedlot Move cattle from pasture to feedlot Seasonal (Brazil), approx. 10 % Generally (Argentina), > 50 % 90-150 days >> less land required for finishing >> more cows/calves can be kept on remaining grassland >> higher carcass weights >> consistency of carcasses >> improved beef quality? >> environmental issues? Page 43 Claus Deblitz
Ingredients Incentives Prices rather than subsidies Integration of producers (where does my beef go?) Technology Genetics Mechanisation Growth promoters Analysis / benchmarking With others and over time Buy or share a weigher Participate in agri benchmark Management Animals (health, performance) Feed (yield and quality) Marketing (Further) education Research Extension and advisory Page 44 Claus Deblitz
My personal conclusions High meat prices (and costs) in the world, not only in Europe Profitability low and driven by feed, land, energy and labour (mainly in emerging economies) (Decoupled) government payments and other enterprises important for whole farm profitability Sheep in 2012 slightly better off than beef Productivity increases will happen, mainly in pasture systems and through transition of finishing from pasture to feedlot Big potential from reducing the gap between bottom 25 and top 25 Education, incentives and extension services are key Page 45 Claus Deblitz 16.06.2013 International comparison
agri benchmark passionate about facts Claus Deblitz Thünen Institute of Farm Economics Bundesallee 50, 38116 Braunschweig Germany Tel.: +49-531-596-5141 Fax: +49-531-596-5199 E-mail: claus.deblitz@ti.bund.de Internet: www.agribenchmark.org www.ti.bund.de/bw Page 46 Claus Deblitz