Meat - OECD-FAO Agricultural Outlook 2011-2020

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The meat sector is adjusting to the supply and demand imbalances in the feed sector of the past three years, which has incited swings in feed prices. Beef and sheep meat farmers are enjoying a period of higher prices, but those producing white meats require supply adjustment to avoid further financial difficulties.

Faced with high production costs, restricted access to credit, high energy costs and a subdued demand during the financial crisis, cattle farmers culled their herds. This initially resulted in a sustained supply of meat products, and prices fell sharply. Prices started to recover as economies pulled out of recession. The red meats sector had liquidated breeding animals and was unable to rapidly satisfy the increasing post-recession demand. As a result, prices recovered strongly in 2010. The supply of pig and particularly poultry meat responded more quickly to the higher demand and, as a result, prices recovered at a slower pace than those of red meats.

• The meat market outlook for the decade ahead reflects the response to sustained high feed costs in a context of firm demand, particularly from developing countries. High price signals in the first half of the Outlook are expected to result in the expansion of livestock inventories, and a subsequent expansion of trade during the second half (Figure 1).
  
  
• World meat production growth is anticipated to slow to 1.8% p.a. dampened by higher costs during the Outlook period, which compares to 2.1% p.a. for the previous decade. The growth is primarily driven by productivity gains from both larger economies of scale and technical efficiency gains, notably for poultry and pigmeat in developing countries (Figure 2).
  
  
• Relative to the previous decade, meat consumption growth in the Outlook period will decelerate due to high meat prices and a slowing of population growth. Demand growth will mostly stem from large economies in Asia, Latin America and oil exporting countries.
  
  
• Driven mostly by an expansion of poultry and beef shipments, world meat exports in 2020 are projected to increase by 1.7% p.a, in the Outlook period, which compares to 4.4% p.a. in the previous decade. Slower growth is largely attributable to reduced import demand by Russia which is seeking to expand its livestock sector. The bulk of the growth in meat exports will originate from South and North America, which together account for 84% of the world increase in exports.

>> Read the full Outlook chapter on meat (pdf, 780 KB)

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