World Food Trends: Pork’s Top Place Challenged by Chicken

BY PETER BEST

  When the final figures for world meat production in 2016 are compiled, they may well show that a major change has occurred in global market shares. From preliminary estimates prepared in the final quarter of 2016 it certainly seems possible that — for the first time ever — the volume of chicken and other poultry meat produced annually worldwide has equaled or even exceeded the output of pork.

  The likelihood that pork would eventually lose its proud claim to be the world’s most popular meat had been predicted for some years on the basis of trends seen in the current millennium. But few ex-pected that a match of annual pig meat and poultry meat output would occur so soon.

  World pork production past trend and forecast

  Production trend for pork and projected increase up to year 2025.

  Comparison of world meat production trends 2000-2016

  A comparison of world production trendlines through the years 2000 to 2016 for pork, poultry meat and beef.

  Lower output

  In round terms, it is now thought that the produc-tion of both types of meat in the current year will have been slightly over 116 million metric tons. For pork this would indicate a downturn from the 117.25 mil-lion tons achieved in 2014. By contrast, poultry meat producers have grown their combined volume from last year’s level of approximately 115 million tons.

  The figure titled "World pork production past trend and forecast" shows the past production trend for pork and the increase in annual tonnage expected up to 2025. Even with the current standstill, the projection remains that an annual total of 130 million metric tons will be reached for pig meat within the next nine years.

  The story of the competing meats is illustrated in the figure "Comparison of world meat production trends 2000 to 2016," which compares the trendlines of pig meat, poultry meat and beef since 2000 and highlights how quickly chicken has moved close to pork for yearly global volume. While the amount of beef produced in 2016 has been less than 8 percent above the 2006 level, for pork the increase works out at nearly 20 percent, and for poultry meat it has been more than one-third.

  Regional shares

  A wide range of contributory factors could be offered to help explain the opposing fortunes of these different meats in 2015 and 2016. One fundamental that cannot be ignored, however, is that the market for chicken and the other forms of poultry are more evenly distributed among the various regions of the world than for pork.

  See the contrast set out in the table "Regional shares of world production in 2016 by meat type," based on 2016 estimates. Although with all three major meats the biggest amount comes from Asian producers, the Asia-Pacific region accounts for only about a third of the total output of poultry meat and beef, whereas for pork, it produces over half of all supplies. Poultry’s especially even geo-graphic distribution gives it a distinct edge when economic conditions vary widely from one part of the world to another.

  Pork has suffered over the past 18 months from market weaknesses in Asia, Europe and Latin America. Against the background of a global slowdown economically, the demand for the meat has failed to register its usual annual growth in a series of key territories so that supplies have been excessive at times and the producer price often poor.

  National volumes

  In the table "Trends in annual pork production" we examine the changing production totals of the larg-est pork producing countries. Out of the 20 countries listed, only two are shown to have reduced their pro-duction in 2015. But they include China, the biggest single producer of pig meat in any year. The figures for Chinese output in the table suggest a drop of 3.3 percent for tonnage last year, equivalent to losing over 1.87 million metric tons. The other to register a reduced volume was Japan, although the Japanese difference is minor by comparison at 10,000 metric tons.

  We calculate that the top 20 countries in 2015 together represented 89 percent of the global total for tons of pork produced, or fractionally less than their 90 percent share in both 2014 and 2013. More significant was the fact that their combined production increased only from 104.2 million met-ric tons in 2014 to 104.4 million tons in 2015 — an extremely modest rise compared with the fact that two million tons were added by the same countries between 2013 and 2014.

  Just one country changed its ranking on the 2015 list, and that was Italy, up to 13th place from 14th previously. It suggests a partial recovery for Italian production after suf-fering a sharp drop since 2013 as the effects of European Union pig housing regulations brought a reduction in pig herds and sow numbers.

  Shrinking sow herds

  Italy’s main pork-producing zone is in the north of the country around the Po Valley. Faced with restruc-turing costs to meet the EU requirement for pregnant sows to be in loose housing rather than single crates, at a time of financial crisis nationally and when pig prices

  were low, various producers in this area also were con-fronted by a reluctance of their sons and daughters to stay in the business.

  Some smaller farms decided to quit, and many of the larger ones opted to switch to contract grow-finishing. Relatively few restructured their sow places. Estimates from within Italy are that the national sow inventory dropped in little more than two years from about 750,000 to fewer than 500,000, although official data for 2015 in-dicate a slightly higher figure.

  Sow numbers have similarly been a central feature of recent pig statistics in China. Sources differ on the actual numbers, but there is general agreement that the Chinese breeding herd had lost sows repeatedly for 20 months until the start of a recovery finally appeared in March 2015. The problem had been low producer prices compared with increased feed costs, compounded by regulatory pressure to move pig production to less inhabited parts of the coun-try for environmental reasons.

  The latest results of our exclusive annual survey of sow numbers in the main pork producing countries is set out in the table "Breeding inventory trends." China had under 38 million sows at the end of 2015 compared with more than 50 million as recently as 2013. Forecasts for Chinese pork production in 2016 have inevitably been downsized on a baseline calculation that the current population of sows would be unlikely to generate more than 50 million metric tons of pig meat.

  Record trade

  China was already a major importer of pork to fill the gap, bringing in 770,000 metric tons in 2015. Now the expectation for 2016 is that it will have imported approxi-mately one million tons. This is taking pork to a projected record of 7.5 million tons traded internationally in 2016, from 7.2 million tons in 2015 and 7 million tons in 2014. Broadly, the export/import trade that traditionally has handled under 4 percent of all pork is now handling 6.5 percent of world production, although the proportion con-tinues to look minor alongside the 11 percent calculated for poultrymeat this year and the 12.75 percent for beef.

  The greater cross-borders trade in pork has become a big influence on the pig price in the exporting countries, not least those within the European Union that had lost their sales to Russia after the Russian ban on EU supplies.

  Spain is a notable example in Europe. Out of a national production of 3.6 million metric tons of pork in 2015, the Spanish industry exported 1.23 million tons, and this in-cluded 128,500 tons to China. The first six months of 2016 saw Spain’s total exports rise to 752,000 tons, and the amount sold to China was up year-on-year by 128 percent.

  FORECASTS FOR CHINESE

  PORK production in 2016 have

  inevitably been downsized

  The downside of this development for Spain has been a rising shortage of places for grow-finish pigs. It was created when the extra exports to China prompted Spanish investors to buy finishing places from existing herds, which then continue to produce weaners, despite lacking a ready outlet for them. The end result in Spain’s case is a relative over-capacity of sows compared with the limited availability of places to grow their progeny.