In July the US Department of Agriculture (USDA) issued its quarterly meat report. USDA said demand for imported meat in China remains incredibly strong as the protein deficit caused by African swine fever (ASF) continues to drive trade.
Despite headwinds caused by COVID-19 and disruptions to the economy and foodservice, demand growth during the first 5 months of the year exceeded expectations. As a result, forecasts for pork, beef, and chicken meat imports are all revised upward.
China continues to increase its share of the global market, accounting for over 43 percent of global pork imports and 29 percent of beef. Altogether, China now accounts for 28 percent of imports by major traders, up from 20 percent in 2019. Despite rising imports and growing production of chicken and beef, total meat consumption is expected to decline 4 percent this year.
The global beef production forecast for 2020 is revised down 1 percent from the prior forecast on lower-than-expected slaughter in Brazil, China, and North America.
Temporary processing disruptions resulted in lower production forecasts for Canada and the United States, while year-over-year growth in China beef production is revised down in the face of stiff import competition.
Meanwhile, depressed domestic beef demand and lower cattle prices in Brazil are causing producers to delay slaughter.
The global beef export forecast for 2020 is unchanged at 10.7 million tons. Estimates for Argentina, Brazil, the European Union, and Mexico are revised higher while those for Canada and the United States are revised lower. Gains for both Argentina and Brazil reflect weak currencies and strong Chinese demand.
Furthermore, the current economic environment has limited domestic beef demand, increasing exportable supplies. During 2020, Argentina and Brazil are expected to export 25 and 26 percent of their respective beef production. For Brazil, this is a record high while for Argentina it is the highest proportion since the 1970s.
Meanwhile, Canadian and US exports are revised lower on temporary processing disruptions and weaker demand from major buyers.
Global pork production is raised 2 percent from the previous forecast to 96.0 million tons on higher expected output in China.
Rebuilding of the Chinese swine herd continues as producers recover from ASF and take advantage of record-high prices, resulting in a 6-percent increase in the forecast. However, hog supplies are well below historic levels and pork production is forecast 15 percent lower year-over-year.
In the United States, slaughter plant closures and measures to address COVID-19 related guidelines drives a 2-percent reduction in the forecast for US pork production since April. Production is also lowered 2 percent for Brazil on reduced slaughter expectations.
The European Union has faced limited COVID-related impacts on slaughtering thus far and production is marginally lowered. Canada’s production is raised due to strong demand for exports.
Global pork exports are raised to 10.9 million tons, almost entirely on strong demand from China. China’s imports are raised to 4.4 million tons, up from the previous forecast of 3.9 million tons. China’s demand continues to buoy global demand while crowding out demand from several more price-sensitive markets. Imports are lowered for the Philippines.
While production has fallen due to the spread of ASF, Philippine imports have been slow to rise due to limited cold storage capacity and weak demand in the hotel, restaurant, and institutional sector.
The forecast for global chicken meat production is revised marginally lower to 100.0 million tons as declines in the United States and China are more than offset by growth in Brazil and the EU.
Despite a dampening in the outlook, world production in 2020 remains higher (nearly 1 percent) versus last year. Demand will be relatively resilient as consumers pursue lower-priced animal protein in the face of an economic downturn.
Global chicken meat exports are revised 1 percent higher to 11.8 million tons as robust China demand propels Brazil, Thailand, and U.S. shipments. Traditional leading global suppliers, Brazil and the United States, are expected to better withstand COVID-related trade disruptions compared to emerging exporters. As a result, Brazil and U.S. exports are forecast to increase their share of global trade to a combined 63 percent.
With highly pathogenic avian influenza-related restrictions in place, the European Union is unable to capture the benefit of rising China imports. That constraint, partnered with depressed shipments to several key markets (Ukraine, South Africa, Vietnam, and Benin) spurs a downward revision to the EU export forecast.