Dynamic changes in the macroeconomic environment and consumer markets have had a structural impact on the global protein market. It’s believed that Asia will remain the center of global growth in the next decade, and China is still considered one of the most valuable markets. The meat industries of various countries are scaling up in the China market.

 Positive outlook of beef market recovery

Representatives of major beef producing countries such as Argentina, the United States, and Australia analyzed the current situation of the beef market and made optimistic analysis of its prospect at the SIAL Global Food Industry Summit-International Meat Forum.

Justin Sherrard, global strategist at Rabobank, believe that the global beef cycle is re-balancing in 2023. U.S. production will fall by 4.5% or even 5% in 2023. With U.S. cattle prices reaching very high levels, in some cases record levels, beef production will be lower in the future. Meanwhile, Brazil is steadily increasing supplies. Australia has been increasing its supply for some time and the increment is starting to supply the market. We're actually very bullish on growth in Australia, up over 5% this year. In Brazil, growth was only a few percentage. But that could lead to some shifts in distribution patterns, as the U.S. starts importing more beef to make up for domestic shortage, while Brazil and Australia are struggling for access to markets such as China and other parts of North Asia, potentially also the U.S. market.

According to Joe Zhu, China Country Manager of the Australian Meat and Livestock Association, there are two global factors affecting the red meat and poultry industry: one factor that determines red meat and poultry is the economy, and when the economy is good, expensive and high-end meat are more popular; when the economy is weak, underdeveloped regions will definitely consume lower price meat. Another factor is protein diversification, which is a global factor and is the same in every market.

He believes that red meat and poultry meat are not in a competing relationship, they are actually growing together. From the perspective of diversification, the proportion of red meat and poultry meat must increase, and the proportion of pork will decrease. If it is placed in countries such as the United States and Australia where the consumption of red meat is the mainstream, and the economy is relatively stable, given the background of diversified protein consumption, their proportion of red meat is obviously declining, and the consumption of poultry meat, including some other healthy meats, will increase.

From 2012 to 2013, Australian beef has grown rapidly in the China market, and has maintained a relatively leading market share for 10 years. Australian beef has undertaken a lot of responsibilities for the industry and consumer education in the China market.

In the past few years, due to the COVID-19, and market access restrictions, Australian beef import to China declined 50% from its peak about 300,000 tons a year. It's time to recover again. What is encouraging is that Australian beef imports have begun to pick up again since last year, even with the sweeping challenge of COVID in the China market in 2022; Secondly, even under such a difficult situation, China is still the largest single market for Australian beef and mutton. In terms of value, China was a high-value market last year , even surpassing Japan. It is expected that the Australian beef to China market will be on a rising stage in the next 2-3 years.

Oscar Ernesto Solis, the Argentine Agricultural Counselor, believes that China has a very large demand and consumption market for beef, and the prospective market is also very large. In terms of Argentina's meat, the percentage of the trade between China and Argentina is also very large. Although the China market has been affected by the COVID, but it’s very resilient and recovering very fast. It is believed that its economy will grow by leaps at the end of this year. Talking about Argentina beef production, the COVID impacts mainly the grains, and the impact on animal husbandry is minor.

Zhihui Yang , vice president of the Asia-Pacific region of the US Meat Export Federation, introduced the production and export of US beef. From 2015 to 2022, the volume of beef production and exports in the United States witnessed double-digit growth. The production of beef has increased from 10 million tons to 12 million tons, and the export of beef has increased from 1 million tons to 1.4 million tons, with a growth rate of 38%. In 2015, the U.S. pork production was 11 million tons, and then there was a 10% increase. Pork exports increased from 2.1 million tons to 2.6 million tons

U.S. beef production plays a very important role in the Asian market. China has been increasing its beef imports from the United States in the past few years, reaching a growth rate of 200% in 2020 and 400% in 2021. Despite the impact of the COVID and the supply chain disruptions, imports are still growing. Given such a great market potential, we believe that China will inevitably become the largest importer of US beef in the future.

The pork market is gradually recovering but still facing challenges

Pork is a very important source of animal protein. Due to the impact of COVID and supply chain disruptions, inflationary pressure and other factors, the global pork market has experienced various challenges. Zhihui Yang, Vice President of the Asia-Pacific region of the US Meat Export Federation, believes that the pork market is gradually recovering, but still facing various challenges.

Zhihui Yang introduced that the U.S. pork industry has turned around after two years of decline, which has supported pork exports. The prospects for pork production in the U.S. are actually the opposite to the EU. The supply of pork in the United States is recovering and rebounding this year. American pork will be the first choice in the global trade.

Zhihui Yang believes that the China market is very important to the US meat industry. China is the second largest importer of the United States pork. In 2020, China's pork imports from the United States increased to 1 million tons, and fell to 534,000 tons last year. Last year, China imported 126,000 tons of pork products, which is a lot lower than the figure two years ago. Last year, the export of US beef reached 2,435,420 tons in the China market, the total volume and total value of China's meat imports are still relatively large.

The United States is the second largest pork exporter in the world, only second to the European Union. There are 27 countries in the European Union, so as a single country, the US is the world's largest pork exporter. The 7.4 billion tons of pork exported by the United States accounted for 25% of the global market share.

From the production forecast of the main pork exporting countries, it can be seen that the EU's production last year was 22.4 billion tons, a decrease of 5%. This year, we predict that the production will further decline to 2.1 million tons, which is almost a 2% decline rate. Compared with the EU, the United States and Brazil will rebound slightly.

The U.S. pork and EU pork markets are different. In 2023, it is expected that EU pork will witness lowest production. In addition to the same environmental constraints as the United States, the EU pork industry is also affected by both African swine fever and China's lower demand for pork production.

The slowdown in the global economy and the strong U.S. dollar show that demand in many import markets will decrease. U.S. pork production and exports will rebound this year, and the global pork supply is sufficient. However, there will be some changes, that is, the pork supply capacity of the United States and the European Union will change, and consumers in major markets still need high-quality red meat. Although the economic downturn will continue, it is hoped that US pork will remain the first choice among the export destination markets.

Poultry protein consumption has seen the largest increment over the past decade

Luis Rua, marketing director of the Brazil Animal Protein Association (ABPA), pointed out that in the past ten years of changes in global meat consumption, chicken protein has the largest increase, with a compound annual growth rate of 1.6%, and pork 0.5%. While pork remains the world's largest source of protein, however, it is growing at a slower rate than chicken. Beef has grown at a CAGR of 0.3% over the past 10 years. China has made contribution to the increase.

In terms of production, according to Luis Rua, the total production capacity of chicken meat in 2022 exceeded 110 million tons, and the United States was the main contributor. From 2021, Brazil is the second largest chicken producer in the world, with chicken production reaching 14.5 million tons in 2022. China ranks the third. The figures for the two countries are very close.

In terms of trade, as early as 2012, chicken became the protein source with the highest international trade volume at that time. Brazil is the world's largest chicken exporter. Brazil exported more than 4.8 million tons of chicken meat to more than 150 countries or regions. China is Brazil's main export destination, accounting for about 15% of its total exports. The growth rate is 33% this year, it is a huge increase compared to 2022. Japan, South Africa, United Arab Emirates, South Arabia, European Union, Philippines, Mexico, South Korea, and Iraq are the top ten major markets for Brazilian chicken this year.

Brazil's chicken production is forecast to be between 14.7 million and 15 million tons in 2023, an increase of 3.5%. Exports are expected to exceed 5 million tons, an increase of about 8% compared to last year. Brazil is one of the countries with the highest per capita consumption of chicken meat, which will reach around 46 kilograms this year.

From 2000 to 2023, Brazil exported 5.6 million tons of chicken meat to China, equivalent to 223,000 containers. 2020 is the year with the highest volume of exports to China. In addition, it is worth mentioning that Brazil is the main supplier of chicken to China. Brazil accounts for 41% of China's chicken imports. But even though Brazil is a major source of import chicken for China, its exports to China account for only 4% of China's total consumption. It’s obvious that Brazil's export only plays a role in supplementing China's local production.

Study and analyze the driving factors to achieve sustainable development

Justin Sherrard, a global strategist at Rabobank, believes that in China, one should look at the animal protein market from a longer-term perspective. Asia will remain the center of global growth for the next decade

Justin Sherrard said the global picture is actually that production growth is slowing down. In some regions and categories, some growth will still be observed. But the overall picture is that growth is slowing down. China's sales have been growing, consumption is growing, and imports are growing. It is inevitable that there will be some growth in the future.

Justin Sherrard pointed out that only by truly understanding the main factors driving the market, we can have the opportunity to find the most accurate position for future growth. Justin also put forward five major development challenges: The challenge of diseases is on the top , followed by lower energy prices, but our feed costs are still high, and labor costs are high. The third is the challenge posed by geopolitical conflicts. The conflict between Russia and Ukraine, and other conflicts in other parts of the world are still affecting trade patterns. The fourth is the need to pay attention to the progress of the sustainable development agenda. The fifth aspect is the supply side.