MSP Issue 23

Regional News
Global Meat Market will be Under Pressure in 2017
Rabobank Expects Reduction in Prices and Profits
According to Rabobank’s report,
global meat market prices will be
under pressure next year due to the
growth of supply. While global meat
consumption continues to rise, a
supply-driven and more competitive
market will create challenges for
producers, putting pressure on prices
and margins.
The meat industry representatives
may also come under additional
pressure due to a number of issues
related to the decreasing antibiotics
use, environmental requirements
and growing retailer competition.
However, the growing pressure is
creating not only challenges but
also new growth opportunities for
the producers and processors that
read the market changes well and
respond swiftly. They are likely to
respond by strengthening supply
chains and increasing transparency,
Rabobank says. “The onus is very
much on producers to mitigate the
concerns of consumers, particularly
around animal health and welfare
issues, by adapting their production
models and supply chains. This is
a challenge which will continue to
be a major theme in 2017”, Justin
Sherrard, Rabobank’s analyst said.
China will continue to exert a huge
influence on global meat markets
in 2017. This country increased
pork imports to record levels of 2.7
mln t in 2016, and experts forecast
that these import levels will remain
constant next year. Beef and poultry
imports are also expected to rise
(particularly, beef imports from the
US are expected to start in 2017).
However, in 2017, the growth of pork
consumption in China will begin
decreasing to less than 1% till 2020
(in 1996—2005, the annual average
consumption growth was 4.3%,
while in 2006—2014 it was 2.8%),
because the demand for this type
of meat by families with moderate
and high income has already been
satisfied.
In the US, meat production is
expected to continue growing, but
consumers’ appetites are being
tested as record levels are reached.
The strong dollar and uncertainty
over future trading relationships with
China and Mexico create potential
headwinds for American producers
(the US is currently the world’s
largest exporter of pork to China,
excluding the EU). Rabobank predicts
that the poultry market in the US will
grow by 2—3% in 2017 versus 1.5%
in 2016, the pork production — by
2.5% in 2017 versus 3% in 2016, while
beef production will increase by 3%.
Due to the production growth in the
US and South America in 2017, the
global prices of beef are expected
to drop slightly, although they will
remain above the average of the past
five years.
In Russia, according to the results
of 2016, the growth of production
of cattle and poultry for slaughter
will increase by 5% and may reach
10 mln t on a carcass weight basis,
Russian Ministry of Agriculture said
previously. According to the Minister
of Agriculture, Alexander Tkachev,
by 2020, the production of cattle
and poultry for slaughter will grow
by 10%. In 2016, the average per
capita meat consumption amounts
to 73.4—73.5 kg/cap. versus 71.6 kg/
cap. in 2015, experts say. According
to the National Union of Pig Breeders,
pork consumption will grow almost
to 25 kg/cap., which is a record level
for the past 25 years, while poultry
consumption will reach 32.7 kg/cap.,
and beef – 13.8 kg/cap.
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Source: www. meatinfo.ru
18 | MSP Magazine • December 2016/January 2017