The Food and Agriculture Organization of the United Nations recently released its annual food outlook. Given the bullish sentiment offered to the U.S. meat sector in 2011 from expanding exports, it is prudent to take note of forecasted changes in 2011 consumption, production, and trade relative to 2010.
The FAO report tracks overall per capita food consumption, without specific delineation of meat products, separately for developed and developing countries. While world food consumption is expected to be up 0.1% for the year, seeing that developing countries are projected to have increasing consumption (+0.8%) and developed countries declining consumption (-0.4%) is interesting. Narrowly, this difference in consumption patterns supports the broad trend of globally changing diets. Much of the developing world is experiencing more robust income growth rates that support increased food consumption overall and meat consumption more narrowly.
Overall world meat production is forecasted to be up 1.3% for the year with poultry (+3.1%) and pork (+0.9%) driving this increase in spite of reductions (-0.5%) in beef production. It is particularly interesting to note that trade volumes of all three meats are expected to increase, particularly in the case of beef where production has declined. Overall meat trade is expected to be up 3.6% for the year (beef +0.9%, poultry +3.7%, and pork +7.9%).
These observations are consistent with the general notion of increasing globalization of the world's meat markets. Moreover, for "free-market economists" such as yours truly this provides positive evidence of the global meat industry increasingly succeeding in distributing meat products to markets most valuing them.
However, significant impediments to trade and substantial risks to stability in future trade patterns remain and are worthy of further industry attention. More broadly, these observations should be duly noted in related discussions such as the recent trade negotiations with key U.S. meat importers such as South Korea, ongoing considerations of how the United States may respond to the recent World Trade Organization ruling regarding country-of-origin labeling, and other deliberations that collectively influence the extent to which global meat trade barriers exist.
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Source: Glynn Tonsor, assistant professor, department of agricultural economics, Kansas State University