According to OECD-FAO (the Organisation for Economic Cooperation and Development and Food and Agriculture Organisation of the United Nations), world meat consumption will increase by 46m tonnes by 2030 to 374m tonnes or 35.7kg per person. To put that volume in context, Ireland produced 633m tonnes in total in 2018 in what was the highest cattle kill over the past 20 years.

Of course, the extra demand is spread across all meat, with poultry and pigmeat the most popular in most regions of the world outside the big beef-consuming countries in South America.

For pigmeat, the consequences of the African swine fever outbreak in China and other Asian countries has been devastating. Chinese production is predicted to fall to 34.5m tonnes in 2020 from 54m tonnes in 2018. This decline is more than twice the total amount of pigmeat traded in global markets and therefore cannot simply be replaced by imports.

The cow herd is predicted to decline by 1.8m, mainly caused by loss of sucklers but some decline in the dairy herd also

Chinese production is predicted to recover during the next decade by the EU outlook but this will take until at least 2025 and involve a major refocusing of the production system away from a multitude of small units with just a few sows to large breeding units with more vertical integration with the processing industry. That suggests that Chinese demand for pigmeat imports will continue for the first half of the next decade, with production rising accordingly to meet this demand. With the pigmeat production cycle relatively short compared with beef, we can visualise that price pressure will return before the middle of the decade as global production increases to meet demand.

Beef

In the EU, consumption of beef is forecast to decline over the next decade. Alongside this, the cow herd is predicted to decline by 1.8m, mainly caused by loss of sucklers but some decline in the dairy herd also as milk yields per cow increase. This means the EU is forecasting a decline in beef production of 700,000t by 2030 on 2019 levels or a 9.3% reduction.

Interestingly, the EU acknowledges that what it describes as “ample supplies from Brazil, the US and Argentina will continue to put downward pressure on EU and world beef prices”, though the forecast is that by the second half of the next decade, prices should increase, with a reduction in global production.

China

On the global stage, Chinese demand and Brazil’s production capability which at the end of 2019 dominate the global beef market are likely to continue throughout the coming decade. Demand for beef imports increased from a negligible amount, less than 18,000t at the start of this decade to a predicted 1.5m tonnes this year. Growth this decade was driven by the increased wealth and growing preference for western diet. However, this will be supplemented by the deficit in pigmeat supply for the first half of the next decade and therefore imports of beef will continue to increase significantly over the coming decade as well.

By the end of this year, Brazil will overtake Argentina as the main supplier. Throughout 2018, Brazil supplied on average 25,000t of beef to China monthly.

This accelerated dramatically over recent months, rising to 40,000t in September 2019, 65,000t in October and over 80,000t in November. This has eased dramatically in recent weeks and is reflected in the beef price which jumped the equivalent of 76c/kg in November only to fall back the equivalent of 40c/kg in December.

Sheep meat

Brexit will affect sheepmeat in the next decade as New Zealand agrees separate free-trade deals with the EU and UK. For the first time in the last year, China has overtaken the EU as New Zealnd’s main export market for sheepmeat and it is likely that it will fill just 50% of its EU quota in 2019 for sheepmeat.

Within the EU, consumption is forecast to increase marginally to 1.8kg per person by the end of the next decade with production remaining relatively stable between 950,000t and 965,000t over the decade ahead.