Pork: 2007 Forecast Overview

Red meat and poultry trade by selected countries will remain strong in 2007. Exports by major traders of beef, pork and broiler meat will increase by 6.5 percent, 2.6 percent, and 4.1 percent respectively. Trade is expected to continue to recover from animal disease outbreaks (bovine spongiform encephalopathy (BSE), foot and mouth disease (FMD), and avian influenza (AI)) and their resulting trade impacts.

2007: Production and consumption

Pork production by selected countries is forecast to increase nearly 4 percent in 2007 to over 103 million tons. However, much of this increase (77 percent) is due to China which accounts for more than half of total pork production by selected countries.

Chinese production expansion slower in 2007 but will remain strong

Chinese pork production and consumption are forecast to increase over 5 percent each in 2007 to record highs of nearly 55.8 and 55.3 million tons respectively. The pace of China’s production growth in 2006 and 2007 will be slower than in recent years due to lower prices. However, meat consumption continues to be driven by urbanization and increasing disposable income. In addition, pork consumption in China has benefited from AI outbreaks after which some consumers substituted pork for poultry.

Exports to increase but only for select major traders in 2007

Pork exports are forecast to increase in 2007 almost 3 percent to nearly 5.3 million tons after an expected 1 percent decline in 2006. Export growth will largely be due to increased U.S. and Brazilian exports.

Japan: Impact of reopening to U.S. beef

Japanese pork imports are expected to decline nearly 2 percent to 1.2 million tons. The reopening of the market to U.S. beef will not significantly impact Japanese pork imports. Stocks at historically high levels and crackdowns on illegal trade are expected to be the major drivers of lower imports.

Brazil: Recovery of exports in 2007 but trade with Russia will decline

Recovering from a slight decline in 2006, Brazilian pork production will increase nearly 5 percent in 2007 to just under 2.9 million tons. This increase in production will be driven by increased domestic demand and the recovery of export markets impacted by FMD outbreaks in late 2005. Russia was the primary market for Brazilian pork exports in 2005, accounting for 67 percent of trade. From January to July 2006, Brazilian pork exports to Russia were down 44 percent from the same period in 2005. However, in the same period, Brazilian pork exports were higher for non-traditional markets such as Hong Kong, Singapore, and Ukraine. Brazilian pork exports are expected to decline 29 percent in 2006. As shipments increase to smaller non-traditional markets to compensate for the loss of major markets, Brazilian pork exports are forecast to rise 6 percent in 2007 to 570,000 million tons.

Historic high for U.S. pork exports

U.S. pork exports are forecast to achieve a historic high of just over 1.4 million tons in 2007. Exports accounted for only 12.8 percent of U.S. pork production in 2005 but are forecast to account for 14.3 percent in 2007. U.S. pork exports to Russia will grow as Brazil will be unable to sustain its position in the Russian market due to FMD. The United States, as well as Canada and the EU will likely benefit from the reduced participation of Brazil in the Russian market.

October 2006