Changing dynamics in global poultry production

06-07-2010 | | |
Changing dynamics in global poultry production

Poultry consumption around the globe has more than doubled between 1990 and 2007. Additionally, the landscape has changed considerably. The US still takes the lead, but other countries now also play a major role, thereby creating new dynamics. What are the regional patterns and shifts over the past two decades, and what are the perspectives until 2018.

By Dr Barbara Grabkowsky and Prof Dr Hans-Wilhelm Windhorst, University of Vechta, Germany 

Between 1990 and 2007, global meat production increased 59%, from 180 to almost 286 million tonnes (t). In 2007, pork contributed 40% to the overall production volume, poultry meat 30% and beef 22%. Continuous growth of poultry meat production from 41 million t to almost 87 million t was mainly a result of the development in the chicken meat sector (Figure 1). The contribution of each continent to global poultry meat production in the analysed time period has changed considerably (Table 1 and Figure 2). In 1990, Asia ranked third behind North America and Europe; in 2007, it had surpassed both continents and was in first place with a share of 35.5%.
The spatial shift between 1990 and 2007 on the continent level is reflected in the composition and ranking of the 10 leading countries (Table 2). The ranking of the three leading countries has changed due to the collapse of the economic system in the former USSR. China could double its contribution to global production and still rank in second position. Brazil was able to expand its share from less than 6% to over 10% and ranked third, whereas the US remained in the top position in spite of a loss of almost 4%. India, not listed among the top 10 producing countries in 1990, ranked in fifth place in 2007. Mexico jumped from tenth position to fourth position. Iran and Indonesia replaced Italy and Spain. In 2007, the UK and France ranked in seventh and eighth place, respectively, with a share of 3.5%, together. 
Asia – the new centre
Poultry meat production in Asia increased from 10 million t in 1990 to 30.9 million t in 2007. East and Southeast Asia contributed 76% to the expansion of production volume, East Asia, alone, contributing 60%. The regional concentration of production is very high. The 10 leading countries shared over 87% of the total production in 2007. A closer look at the composition and ranking of the 10 leading Asian poultry meat producing countries shows some interesting developments (Table 3). Japan, ranked second in 1990 behind China, but was unable to maintain this position. In 2007, it ranked fifth behind India and Indonesia, primarily a result of high production costs and the lack of space for large production units.
A similar trend can also be observed in other sectors of animal production. The growth rate in India is remarkable, for the production volume in 2007 was six times as high as in 1990. Thailand went down in the ranking due mainly to the lasting impact of the Avian Influenza outbreaks. Myanmar and the Philippines replaced the Republic of Korea and Saudi Arabia. The dominating position of Asia in global poultry meat production is mainly due to the dynamic development in China, India, Iran and Indonesia.
Still high growth in the Americas
Production volume in North America increased by almost 11 million t; however, it was unable to maintain its leading position. The dynamics in Asia resulted in a decreased contribution to global poultry meat production from 30% to 26.8%. In contrast, the expansion of the production volume by 10 million t led to a considerable increase of the contribution of Central and South American countries from 11% to 17%. The regional concentration of poultry meat production in the Americas is also very high. In 2007, over 96% was contributed by the 10 leading countries.
The analysis of the composition and ranking of the top 10 North and Latin American countries shows that the US and Brazil contributed 74.7% to the production volume of the Americas in 2007 (Table 4). Their share, however, was 4% lower than in 1990, due to the fact that in all 10 countries poultry meat production increased. High absolute growth rates were seen in Mexico, Argentina, Peru and Chile. In Chile, the production volume was four times higher in 2007 than in 1990, and in Peru three times as high. There were only minor changes in the ranking. The dominating position of the US and Brazil, which are also the two leading broiler meat exporting countries, is obvious.
Different dynamics in Europe
Europe, the only continent with a growth rate much lower than the global average, lost almost half of its contribution to global poultry meat production between 1992 and 2007. The sub-regions show completely different dynamics – the production volume in Eastern Europe increased by 1.3 million t (39%) and in Northern Europe by 540,000 tonnes (36%), whereas in Southern Europe by only 120,000 t (4.8%). Western European countries showed a considerably lower relative growth rate with only 14.6%, even though the production volume increased by 480,000 t.
The different dynamics in the sub-regions are reflected on country level (Table 5). Germany (+430,000 t), Russia (+300,000 t) and Spain (+230,000 t) showed the highest absolute growth. In contrast, the production volume decreased by 300,000 t in France and 155,000 t in Italy. In Germany, the high growth rates were a result of an increase in per capita consumption. This, however, led to an overproduction in the turkey meat sector and a long phase of low market prices. After several years of adapting to the new socio-economic conditions, a stabilisation of the situation in Eastern Europe can be observed from 2000 on. This is partly a consequence of investments by Western European poultry companies, such as the German company Wiesenhof in Poland. The drastic reduction of the production volume in France is due to the steady development in the turkey industry, which suffered from a lasting price depression. Several outbreaks of Avian Influenza in the production centres in northern Italy caused negative development. 
Minor position, Africa & Oceania
With a contribution of only 4.2% to global poultry meat production, Africa did not play a major role in the global industry. Compared to Asia, the Americas and Europe, the production volume in most African countries was very low. Even in 2007, no country produced more than 1 million tonnes. The three leading countries, South Africa (982,000 t), Egypt (666,000 t) and Morocco (410,000 t), shared 57% of African poultry meat production.
With a volume of only 1 million tonnes, Oceania shared 1.2% of global poultry meat production in 2007. About 83% of the total production volume was contributed by Australian poultry companies, and 15% by companies located New Zealand. The long distances to the markets in Asia, together with a low domestic demand, limit a further expansion, even though the feed potential would allow much higher production figures.
Growth will continue
In spite of the fact that the recent economic and financial crisis has led to a stagnation and even a decrease in poultry meat production in some regions, such as in the US, it can be expected that this sector will soon show high growth rates once again. This optimistic view is based on the fact that the feed conversion rate of broilers is far better than that of pigs and cattle, and that there are no religious taboos against poultry meat.
The Food and Agricultural Policy Research Institute at the Iowa State University projected the development of broiler meat production for leading countries between 2008 and 2018 (Table 6). Their prognosis shows that relative growth rates between 14% and 35% are expected. For the EU-27, an increase of only 5.9% is projected, and for Japan a decrease of 5.1%. Asia will be able to strengthen its leading position because of the dynamic development in China, India and Thailand. In contrast to Europe, the Americas will gain market share because of high growth rates in the US, Brazil, Mexico and Argentina. The regional concentration will continue to increase as a consequence of the high absolute growth in the three leading countries in broiler meat production.