Milling & Baking News Corporate Profiles - 2019 - 34

INDUSTRY REVIEW: MEAT AND POULTRY

Meat and poultry
Ripple effects of African swine fever in Southeast Asia will be felt globally
hile the spread of African swine fever (A.S.F.) in Asia and plant-based
protein "meat" alternatives in the United States garnered many headlines in 2019, U.S. red meat and poultry supplies remained ample, if
not record high. Per capita red meat and poultry disappearance in the United
States in 2019 was forecast at a 12-year high. Pork exports soared.
It was August 2018 when the first reported outbreak of A.S.F. in China occurred. With attempts to control A.S.F. but no indication of success in China, the
deadly hog disease has spread throughout Asia, including outbreaks in the Philippines and South Korea reported in September. It has been estimated that as
much as half of China's hog herd (the world's largest at more than 700 million)
has been lost or culled because of A.S.F., although official estimates from China
are much lower, but still dramatic - in the 20%-to-30% range. The disease
has slashed pork supplies in many countries, especially China, and reduced feed
demand. The global impact of A.S.F. began to emerge during the year.
The long-term effect of A.S.F. is beginning to play out, but the current instability in the market likely will linger until the cause of the disease spread
is interrupted, according to the financial services firm Rabobank in its October
report "African swine fever: A global update." Until factors such as improvements in biosecurity are established or an effective A.S.F. vaccine is available
for widespread use, market volatility was expected to continue.
"We anticipate relatively unstable market conditions over the coming three
to five years," Rabobank said in the report.
The U.S. Department of Agriculture, in its September Livestock, Dairy and
Poultry Outlook, forecast 2019 U.S. pork exports at 6,530 million lbs, up 11%
from 2018, and 2020 exports at 7,065 million lbs, up another 8%. The increase was due to strong exports to Mexico and China.
In July, Mexico, the top importer of U.S. pork, took 150,753,000 lbs of U.S.
pork, up 18% from July 2018 and equal to 28% of total U.S. pork exports.
Tariffs on pork exports to Mexico were lifted in May after being imposed in
June 2018. Shipments to China/Hong Kong totaled 112,671,000 lbs in July,
up 380% from July 2018 and equal to 21% of the July total. China moved
from the fifth largest importer of U.S. pork in July 2018 to the second largest in
2019, displacing Japan.Total pork exports in July were up 27% from July 2018.

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Strong U.S. exports will be needed as annual domestic production continued to set record highs. The U.S.D.A. forecast 2019 U.S. pork production at
27,578 million lbs, up 4.8% from 2018, the fifth consecutive record high and
surpassing beef production for the first time since 2015 and only the second
time since 1952. Pork outturn was projected at 28,410 million lbs in 2020,
up another 3%.

Beef, broiler production climbs
Beef production in the United States was forecast at 26,953 million lbs in
2019, up 0.3% from 2018 and second only to 27,091 million lbs in 2002.
Production in 2020 was projected at a record high 27,670 million lbs, up
2.7% from 2019.
Broiler production, which has set records every year since 2009, was forecast at 43,467 million lbs in 2019, up 2% from 2018, and at 44,000 million
lbs in 2020, up 1.2% from this year.
The U.S.D.A. forecast total 2019 U.S. red meat (beef, pork, lamb, mutton)
and poultry (chicken and turkey) per capita disappearance (retail basis, including
exports, thus not the same as per capita consumption) at 221.4 lbs, up 0.9%

UNITED STATES

red meat and poultry forecasts
PRODUCTION
million lbs
Beef
Pork
Broilers
Turkeys
Total red meat
and poultry

2016
25,221
24,941
40,696
5,981

2017
26,187
25,584
41,662
5,981

2018
26,872
26,315
42,601
5,878

2019*
26,948
27,578
43,667
5,846

2020*
27,670
28,680
44,385
5,910

97,614 100,169 102,435 104,767

107,419

PER CAPITA DISAPPEARANCE
retail lbs
2016
2017
Beef
55.6
57.0
Pork
50.1
50.2
Broilers
89.8
91.0
Turkeys
16.7
16.4

2018
57.2
50.9
92.4
16.2

2019*
57.2
51.7
94.3
16.0

2020*
57.7
52.1
95.4
15.8

Total red meat
and poultry

219.5

221.7

223.8

214.6

217.2

Source: U.S. Department of Agriculture

34 \ November 2019

*forecast

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