World livestock and poultry exports forecasted to rise despite decline in beef and poultry production

GLOBAL – According the Global Agricultural Information Network report on livestock and poultry world markets and trade by USDA, the global export forecasts for beef and chicken meat trade have been trimmed due to emerging threats from the spread of the COVID-19 virus.

Economic growth forecasts have been cut for 2020 and the impact on consumers will dampen demand for animal protein.

Widespread closures of restaurants and food service outlets as well as a reduction in tourism and travel will shift demand for protein among both types of meat as well as cuts.

Furthermore, shipping disruptions have already impacted global trade by clogging ports and reducing container availability, at least in short run.

The report has indicated that full impacts are likely still to develop, but the livestock and poultry sectors’ response at all levels of the supply and distribution chain are likely to impact supplies in the future.

Contrasting extensive economic headwinds, impacts from African swine fever in China and other countries remain a dominant factor in the market for pork.

Exports are raised for pork as sharply lower pork production in China is still expected to drive record trade. However, COVID-19 has added significant uncertainty to the forecasts and is expected to disrupt trade in 2020.

In the GAIN report for July, the global beef production forecast for 2020 has been revised down 1% from 61.5m tonnes in April to 60.7m tonnes 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 at 1.280m tonnes and 12.2m tonnes respectively while year over-year growth in China beef production is revised down to 6.780m tonnes from 6.950m tonnes 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 (760,000 tonnes prev. 675,00 tonnes), Brazil (2.55m tonnes prev. 2.5m tonnes), the European Union (350,00 tonnes prev. 320,000 tonnes), and Mexico (355,000 tonnes prev. 320,000 tonnes) are revised higher while those for Canada (500,00 tonnes prev. 590,000 tonnes) and the United States (1.3m tonnes prev. 1.43m tonnes) 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% of their respective beef production. For Brazil, this is a record high while for Argentina it is the highest proportion since the 1970s.

Meanwhile, Canada and U.S. exports are revised lower on temporary processing disruptions and weaker demand from major buyers.

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Global pork production is raised 2% from 94.3m tons to 95.9m tons on higher expected output in China from the rebuilding of the swine herd as producers recover from ASF and take advantage of record-high prices, resulting in a 6% increase in the forecast.

However, hog supplies are well below historic levels and pork production is forecast 15% lower year-over-year.

In the United States, slaughter plant closures and measures to address COVID-19 related guidelines drives a 2% reduction in the forecast for U.S. pork production to 12.95m tons from 13.176m tons.

Production is also lowered 2% for Brazil on reduced slaughter expectations from 4.13m tons to 4.03m tons. 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 despite production falling due to the spread of ASF as the country has 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 100.0m 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 by nearly 1% from 99m tons to 100m tons. 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% 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%.

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.

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