Global meat consumption & trade – meat consumption patterns change drastically due to change in lifestyles, incomes and health concerns; growth in meat production and trade expected to decrease by 2% in 1992; poultry leads meat production and trade in growth; per capita consumption of meat grows at slower rate than global production; percentage of meat traded continues to be small share of world output; meat trade continually affected by concerns of livestock disease and chemical residue contamination – U.S. Dept. of Agriculture, Economic Research Service Report
Over the past 10 years, worldwide meat consumption patterns have changed dramatically. Government regulations, changing lifestyles and incomes, and attitudes about the relationship of meat consumption to health are among the factors reshaping worldwide demand.
This article, the first in a series on international trade in meats, canvases overall recent developments in consumption and production in the world’s major producing and consuming regions. Future articles will examine the beef, pork, and poultry sectors more closely, detailing how particular trends are generating changes.
Poultry Leads Production Gains
Shifting patterns of world production and consumption have led to a 4-percent increase in meat trade each year since 1985. World meat production has also shown steady growth, increasing an average of 3 percent per year from 1985 to 1991. But growth in both production and trade is forecast to slow to about 2 percent in 1992.
Poultry led the recent growth in both meat production and trade, increasing at average annual rates of 6 and 8 percent since the mid-1980’s. Poultry’s rapid gains in production and trade reflect greater feed efficiency, with a shorter time period required for production of poultry compared with other grain-fed animals. In some countries, poultry has become less expensive to consumers than other meats.
Even though poultry has led the recent growth in meat production, its share of world meat production in 1991 still amounted to less than a quarter. Pork dominates with 41 percent of global meat production, followed by beef, with 31 percent.
While production of pork, beef, and poultry has grown, output remains concentrated among a few key countries or regions. Almost half the world’s poultry is produced by the U.S. and European Community (EC). The U.S. share is about 30 percent, and the EC’s about 18 percent, followed by China, the former USSR, Brazil, and Japan. Some developing countries have increased poultry production dramatically. Between 1985 and 1990, Turkey increased production 150 percent and India 107 percent, and production is forecast to increase further in 1992. But most of these countries remain relatively small producers.
Pork output increased an average of 3 percent per year between 1985 and 1991, and could reach 66 million metric tons in 1992. Over half the world’s pork is produced in three countries. China is the largest producer, with about a third of the world’s output. The U.S. is second, with about 12 percent, followed by the former USSR with 10 percent. The EC-12 produces slightly more than the U.S. and USSR combined. Other major pork producers are Eastern Europe and the Pacific Rim.
Beef and veal production has grown more slowly, rising less than 1 percent annually between 1985 and 1991. After declining in 1991, production is expected to increase to 49 million tons in 1992.
The U.S., EC, and former Soviet Union account for nearly 60 percent of global beef production. The predominant beef producer is the U.S., with 22 percent of output in 1991. The former USSR ranks second, with about 18 percent, followed closely by the EC. Argentina and Brazil account for approximately 8 and 7 percent.
Per Capita Growth Trails Output Advance
While more people are consuming meat, growth in per capita consumption has not kept pace with increases in output. Global production of meat has increased an average 3 percent per year since 1985, but per capita consumption grew by less than 1 percent per year. Between 1975 and 1991, per capita meat consumption grew 23 percent, due primarily to increased consumption of poultry, up 65 percent.
On a per capita basis, the largest meat consumers are the U.S. (118 kg), Hungary (96 kg), Australia (106 kg), Denmark (99 kg), and Canada (97 kg). The EC countries together consume 83 kg per capita, compared with Eastern Europe at 76 kg, and the former Soviet republics at 67 kg annually.
Traditionally, beef has been the meat of choice for U.S. consumers, but poultry is forecast to achieve first place in 1992, measured on a carcass-weight or ready-to-cook basis. Over the period 1975-91, per capita beef consumption declined 6 percent, as poultry consumption cut into beef demand–both in the U.S. and in other regions of the world.
Poultry consumption per capita has grown more than 60 percent since 1975. Brazil recorded the largest growth, over 200 percent. In the U.S. and the former USSR, per capita consumption was up over 80 and 90 percent.
Pork remains the predominant meat consumed in Europe. In the major reporting countries, per capita pork consumption rose 16 percent from 1975 to 1991, led by advances in China, Taiwan, and Denmark. But most of these gains were offset by declines in East Central Europe and stagnant demand in most other regions. In many nations of the world, religious practices bar pork consumption.
Rising Income Fuels Meat Demand
Even if meat prices remained constant, consumption patterns would change with trends in incomes and lifestyles, and developments in production, processing, and distribution. Shifts in government policies influencing availability and pricing also affect consumption.
Income is the most significant factor affecting demand for meat. Demand generally will increase with higher income, but consumption tends to level off and may even decline at the highest incomes. Rising incomes also change the types of meat demands. More expensive meats or cuts of meat, for example, become affordable at higher incomes.
The Middle East and East Asia provide examples of increased meat consumption accompanying economic growth–due to rapid industrialization in the case of East Asia, and rising oil revenues in the Middle East. East Asia experienced a 167-percent increase in per capita meat consumption since the mid-1970’s. Per capita consumption in Middle Eastern countries also grew rapidly from the 1970’s to the mid-1980’s.
Reduced incomes, on the other hand, may lower meat consumption, or bring about a switch to lower priced meats. With the collapse in oil prices in the mid-1980’s, meat consumption stagnated in the Middle East, and in Mexico, per capita its consumption of total meat declined during the 1980’s as real incomes fell. Mexicans reduced their consumption of beef and pork, and shifted to lower priced poultry. The level of red meat consumption in Mexico has recovered somewhat in the 1990’s with an increase in consumer purchasing power.
Changing lifestyles also affect consumption and trade patterns. As consumers demand more food away from home, for example, the market for fast foods such as fried chicken and hamburgers increases. In many higher income countries, consumer preferences have shifted from large cuts of meat like roasts, toward foods that are simple to prepare, like steaks, chops, and deboned chicken breasts.
Health consciousness about the fat content of foods has increased demand for leaner cuts of meat. Health concerns can also alter trade patterns, as when the EC banned imports of meat produced with growth hormones.
On the supply side, vertical integration in U.S. poultry production resulted in a greater supply of relatively low-cost poultry products. Trade opportunities have increased with technological advances in transportation of highly perishable products like meat. Technology has also increased shelf life, improved product packaging and presentation, and affected preparation–microwave cooking is an example. All these developments in turn influence consumption and trade patterns.
Government policies can affect consumption directly or indirectly. Importing feed to increase domestic meat production is a measure adopted by Central and Eastern Europe, the former Soviet Union, and some Asian countries. In some instances, poultry production is emphasized since the feed conversion of poultry is more efficient than with cattle or hogs–enabling producers to obtain more meat per unit of feed input. When governments import meat, as in the Middle East, they often look for the least expensive varieties such as poultry or surplus beef from the EC, which uses subsidies to encourage its meat exports.
Meat Trade Small Relative to Output
The volume of meat traded remains a very small share of world output. Excluding trade among EC member countries, only about 9 percent of the beef produced, 3 percent of pork, and 6 percent of poultry is exported. Even accounting for trade among EC members, the percentage traded rises only slightly.
Changes in supply and demand in various countries over the last few years have increased the total quantity traded and changed the mix of meat exported. However, preliminary figures indicate that meat trade will decline about 10 percent in 1992 after peaking in 1991. Meat exports grew 26 percent from 1985 to 1991, led by a 72-percent gain in poultry meat. Beef trade advanced 21 percent, pork 20 percent, and lamb, mutton and goat increased 4 percent.
Japan–relatively new to beef trade and with a rapidly growing taste for beef–is forecast to increase its imports, following the removal of import quotas. As a major supplier to Japan, the U.S. has increased its overall export ranking from sixth to third since 1985.
Large meat-producing countries are often also engaged significantly in trade–both as exporters and importers. This is particularly true of the U.S. and EC. The U.S. is the world’s largest beef producer and exporter, as well as a leading beef importer. Likewise, excluding China, the EC is the largest pork-producing region of the world, and also ranks among the top importers and exporters of pork.
On the other hand, countries like Taiwan and Denmark rely on trade to augment or dispose of supplies. Denmark and Taiwan consume only 27 and 75 percent of their production; they must export the rest to balance supplies. The world’s largest pork-producing country, China, is also a major pork exporter. The ranking of these traders can change dramatically over time, depending on their domestic supplies.
Health & Safety Issues Shape Trade Flows
Meat trade continues to be affected by legitimate concerns about the spread of livestock disease and contamination by chemical residues. The occurrence of foot-and-mouth disease in some countries, for example, precludes fresh meat exports from these countries to areas where the disease is not evident.
Some actions are of a temporary character, such as the Japanese ban on imports of pork with sulfamethazine residues, the removal of Brazil from the U.S. list of acceptable residue testing programs, and Mexico’s ban on imports of U.S. hogs believed to be infected with Swine Infertility and Respiratory Syndrome (also known as Mystery Reproductive Syndrome). Each of these bans was over-turned after the situation was corrected, either through a certification program or by bringing the exporting countries’ standards into line with those of the importing countries.
However, other health and sanitary restrictions may lack a strong scientific basis. Efforts are underway to harmonize many of the major trading countries’ health and sanitary regulations.
In addition to health and safety issues, meat trade flows are impeded by government policies that insulate domestic crop and livestock producers from world market forces. Import restrictions and tariffs are two of the most commonly used border measures for protecting a domestic industry.
Trade barriers are now being addressed in bilateral and multilateral negotiations aimed at reforms. The Urguay Round of the General Agreement on Tariffs and Trade (GATT) has involved the largest number of participants.
Analyses of several trade liberalization proposals have indicated that as barriers are removed, global meat production would not change significantly. World trade in meats would increase slightly as countries loosened trade barriers, and trade increases by some countries would offset declines by others. Countries currently dominant in international meat markets would continue to exert a major influence in trade following reforms.
Other reform efforts are ongoing at the bilateral or regional level. Among these are U.S.-South Korean negotiations on beef liberalization, and talks on reform of the EC’s Common Agricultural Policy and the North American Free Trade Agreement. Although it is too early to explore the specific outcome of each of these negotiations, they are certain to have an impact on international meat trade.
With economic growth expected to be positive over the next decade, the potential exists for expanding world production and trade in meat and meat products. Much will depend on continued advances in tailoring products to meet individual demands as the patterns of global meat consumption change. #Shayle Shagam and Linda Bailey (202) 219-1285]
COPYRIGHT 1992 U.S. Department of Agriculture
COPYRIGHT 2004 Gale Group