World Pork Demand Continues to Increase

by 5m Editor
17 November 2004, at 12:00am

GLOBAL - World demand for pork continues to grow despite rising prices. During the first 6 months of 2004, average wholesale pork prices in the United States, Europe and Japan increased by more than 15 percent. Retail prices have remained relatively more stable, helping to sustain world consumption at record levels.

As beef and poultry markets gradually recover from the disruptions of BSE and avian influenza, growth in world pork consumption should continue, although at a slower rate. Pork remains the most widely consumed meat protein around the world, even though poultry is catching up.

Rising incomes, particularly in China, seem to be driving growth in world demand. In the United States, the popularity of low carbohydrate / high protein diets appears to be energizing consumer interest in pork. With growing worldwide demand, pork production is working to keep pace. China, the EU, Canada, the United States and Brazil will collectively produce more than 80 million tons of pork in 2004. These countries account for an estimated 80 percent of world production. Production for the selected reporting countries is expected to continue growing, increasing by about 1 percent in 2005.

The expansion of world consumption and production underscores the increasing importance of trade, even where countries have the capacity to be self-sufficient. Regional differences in the consumer preference for particular meat cuts create opportunities for trade. Meat cuts can potentially be marketed wherever they receive the highest price. Trade in meat cuts is in fact growing relatively faster than trade in whole or half carcasses.

Over the last two years, exports of whole and half carcasses from major world suppliers have grown 5 percent, while trade in pork meat cuts has grown by almost 8 percent. However, as more high-value meat cuts are traded internationally, the profit potential is often mitigated by a number of factors.

In many developed countries, there is an increasing cost with conforming to more stringent environmental and animal welfare regulations. There is no clear evidence to suggest that consumers are willing to pay for this added cost as yet. Trade is also quite vulnerable to the many complexities that determine market access. Unlike domestic markets, international trading arrangements can sometimes change dramatically overnight.

Notwithstanding these many uncertainties, major pork producers continue to aggressively vie for very lucrative international market shares. Pork exports by the major suppliers, which are projected to reach 4.2 million tons in 2004, are projected to grow by 1 percent in 2005.

Source: USDA, Foreign Agricultural Service November 2004

5m Editor