© gira 20131 global sheepmeat and beef market developments presentation to mia, b&l conference,...
TRANSCRIPT
© Gira 2013 1
Global sheepmeat and beef market developments
Presentation to MIA, B&L conference, AucklandJuly 8th 2013
Richard Brown+44 1323 870144 [email protected]
© Gira 2013 2
Optimistic agenda
1. Global all meats outlook2. Global sheepmeat outlook
EU and UK focus (GMC) China (GAMC)
3. Global beef market context EU beef market situation (GMC) Indian beef outlook (GAMC)
© Gira 2013 3
2012/13 total meat consumption growth rates lower than historical average due to higher prices (higher production costs … and
caution)
51 958 51 884 52 023 51 13951 058(-0.2%)
51 224(+0.3%)
8 277 8 263 8 318 8 219 8 261 (+0.5%) 8 425 (+2.0%)
93 227 95 939 98 600 97 88299 123
(+1.3%)100 619(+1.5%)
74 679 75 037 77 818 80 71182 043(+1.6%)
83 360(+1.6%)
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
180 000
200 000
220 000
240 000
260 000
280 000
2008 2009 2010 2011 2012 2013
('00
0 t
cw
e)
Fig SYN-GEN World Meat Consumption, 2008-2013(f)Poultrymeat
Pigmeat
Sheepmeat
Beef & Veal
Total: 240 mio t (+1.1%)
Total: 243 mio t(+1.3%)
© Gira 2013 4
Higher producer prices: Apparent 2012 price downturn for pork is heavily influenced by CN price
90
100
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200
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Pri
ce
in
dic
es
, c
on
sta
nt
pri
ce
sAll meat producer/wholesaler price indices, 2001-2013(f) (2001 L.C.)
Including China
SHEEPMEAT
BEEF & VEAL
PIGMEAT
ALL
POULTRY
Source: GIRA GMC 2012
Based on 2001 producer prices
Weighted (consumption) averages
© Gira 2013 5
Excluding Chinese influence: sharp price increase for BF, PK & PY since 2009 … but SH down (consumer resistance?)
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90
100
110
120
130
140
150
160
170
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Pri
ce
in
dic
es
, c
on
sta
nt
pri
ce
sAll meat producer/wholesaler price indices, 2001-2013(f) (2001 L.C.)
Excluding China
SHEEPMEAT
BEEF & VEAL
ALL
POULTRY
PIGMEAT
Source: GIRA GMC 2012
Based on 2001 producer prices
Weighted (consumption) averages
© Gira 2013 6
(Incl. China:) Meat expenditure was strong in 2011. Slowing down in 2012 for PK but up for all meats in 2013
70
100
130
160
190
220
250
280
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Ex
pe
nd
itu
re i
nd
ex
, c
on
sta
nt
pri
ce
sAll meat expenditure* index, 2001-2013(f) (2001 L.C.)
SHEEPMEAT
PIGMEAT
POULTRY
ALL
BEEF & VEAL
Source: GIRA GMC 2012
Based on 2001 producer prices
* Expenditure = producer/wholesale prices x total consumptionWeighted (consumption) averages
© Gira 2013 7
(Excl. China:) the meat expenditure trend is strongly upward … mainly reflecting higher meat prices
70
100
130
160
190
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Ex
pe
nd
itu
re i
nd
ex
, c
on
sta
nt
pri
ce
sAll meat expenditure* index without China, 2001-2013(f) (2001 L.C.)
POULTRY
ALL
BEEF & VEAL
PIGMEAT
SHEEPMEAT
Source: GIRA GMC 2012
Based on 2001 producer prices
* Expenditure = producer/wholesale prices x total consumptionWeighted (consumption) averages
© Gira 2013 8
Unemployment rates EU, 2012(e) High rates, and getting worse in most MS’s in 2013
Unemployment rates within the EU, 2012(e)
Source: GIRA from European Commission
© Gira 2013 9
Not surprisingly, EU per-capita meat consumption slowly declining since 2007. We forecast -1% decline in 2013
Per capita Meat Consumption, 2000-2013(f)
EU average consumption per capita 2012 and % changes
12/11 and 13/12
─ Beef & veal: 15.4 kg-3.6% in 12
-0.9% in 13
─ Pigmeat : 40.7 kg
-1.5% in 12
-1.8% in 13
─ Poultry : 24.5 kg+1.3% in 12
+0.2% in 13
─ Sheep : 2.1 kg -4.9% in 12
+ 1.2% in 13
─ TOTAL : 82.8 kg• -1.1% in 12• -1.0% in 13
Source: Gira
0
10
20
30
40
50
60
70
80
90
100
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Meat
co
nsu
mp
tio
n (
kg
/ c
ap
ita)
Sheep
Poultry
Beef & veal
Pigmeat
© Gira 2013 10
2012 price increases, especially for BF&PK 2013: big PK price rise, BF&SH prices down (Wrong!)
EU Meat Producer Prices (2000 EUR/t cwe), 2000-2013(f)
Note : wholesale prices for poultrymeat and producer prices for other meats
Source: Gira GMC Dec 12
1000
1500
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2500
3000
3500
4000
4500
5000
2000
2001
2002
2003
2004
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2008
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2000 E
UR
/ t
cw
e Sheep
Beef & veal
Average
Pig
Poultry X
X
© Gira 2013
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Exp
en
dit
ure
ind
ex (
2000=
100)
co
nsta
nt
2000 p
rices
Beef & veal
Pigmeat
Poultry
Sheep
TOTAL
11
EU expenditure increase in 2012 & 13 for all meats excl. sheepmeat.
EU Meat Expenditure Index, 2000-2013(f)
Note : wholesale prices for poultrymeat and producer prices for other meats
Source: Gira GMC Dec 12
FMD
BSE
HPAIAI in the NL
GFC EU inrecession
+feed priceshock
© Gira 2013 12
Optimistic agenda
1. Global all meats outlook
2. Global sheepmeat outlook EU and UK focus (GMC) China (GAMC)
3. Global beef market context EU beef market situation (GMC) Indian beef outlook (GAMC)
© Gira 2013 13
Sheepmeat Net Production by Country 2001-2013: Small upward trend but more of a long period stability
© Gira 2013 14
Sheepmeat Consumption by Country, 2001-2013:Supply & price constraints…
© Gira 2013 15
Sheepmeat Consumption per Head by Country, 2001-2013:Erratic movements in export-oriented countries... Difficult meat for many
young urban consumers... But ethnic demand
© Gira 2013 16
Lamb Importers: Trade moving upwards, with declining prices... More to MENA, CN, North America... EU demand enough to raise imports?
© Gira 2013 17
Lamb Exporters: Increasing from the main shippers from Oceania South America remains constrained
© Gira 2013 18
Sheep Producer Prices (USD/t cwe), 2001-2013: After a decade of upward movement, a pause??... Amplified by stronger USD
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Sheep Producer Prices, 2001-2013 (Current USD/t cwe)
EU (light lamb)
EU (heavy lamb)
NZ (lamb)
UY (lamb)
AU (mutton)
© Gira 2013 19
Sheepmeat producer price trend: downward trend after 3-4 years growth linked with supply constraints… EU flat… RU further growth
© Gira 2013 20
Sheepmeat demand: long term demand trend dominated by CN … and illustrates a problem but not a disaster in EU
?
© Gira 2013 21
Trends in Trade Prices Sharp declines in both Oceania exporters
50
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200
250
300
350
400
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Trends in trade prices. Sheepmeat, 2003-2013 (Legend values for 2011)
AU chilled lamb; 11 000 USD/t pw
NZ lamb FOB; 7 924 USD/t pw
NZ mutton FOB; 5 179 USD/t pw
?
© Gira 2013
EU production stabilising? … almost? due to higher pricesConcerns over demand
EU Sheepmeat Balance 2001-2013f
0
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400
600
800
1 000
1 200
1 400
1 600
2001
2002
2003
2004
2004
2005
2006
2007
2007
2008
2009
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2011
2012
2013f
'000 t c
we
Consumption
Net production
Imports
Exports
Source: Gira
EU15 EU25 EU27
?
© Gira 2013 23
EU ‘heavy’ lamb prices reflect supply tightening again: ‘light’ lamb a S.EU problem (of economies)
4. News
250
350
450
550
650
750
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 |
€ur
o / 1
00kg
Development of the EU average market price for Heavy and Light Lamb carcases
Light lamb
Heavy Lamb
© Gira 2013 24
EU production seems to be stabilising @ lower level
4. News
98
5
98
5
97
1
1 0
21
94
9
74
8
71
7
73
0
70
7
71
4
179157
178178 178
75 73 6872
7860
5959 54 51
27
8
25
6
26
3
22
6
22
6
22
2
17
5
15
5
11
1
11
1
5.0
10.0
15.0
20.0
25.0
30.0
35.0
0
250
500
750
1 000
1 250
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Sh
ee
p C
arc
as
e w
eig
ht
in K
G
in 1
00
0 T
on
ne
s
Sheep and Goat meat supply in the EU2003 = EU 15 2004 = EU 25 2007 = EU 27
sheep Non official goat Imp - Exp (Pw) Cw Heavy Cw light
© Gira 2013
Sheepmeat Net Production: UK 2012 climate impact but price stabilising key producers except ES
25
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013f0
50
100
150
200
250
300
350
Figure EU-SH 1: Sheepmeat Production (Net), 2001-2013f
United Kingdom
Spain
France
Greece
Ireland
Romania
00
0 to
ns
cwe
?
© Gira 2013
EU per capita Sheepmeat consumption Stabilisation at EU level? Further declines in ES
26
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
f0
1
2
3
4
5
6
7
8Figure EU-SH 3: EU Sheepmeat Consumption, 1999-2013f (excl. GR, CY)
United Kingdom
Romania
France
EU-15
Spain
EU-27
Bulgaria
Belgium/Lux
Italy
Germany
kg.
per
capi
ta
Source: Gira Meat Club
© Gira 2013 27
With weak GBP, UK prices are more motivating for producers … but a concern for retailers (and processors)
4. News
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
*Av
3...
0.00
1.00
2.00
3.00
4.00
5.00
6.00
UK Livestock producer prices, 1990-2013
Lamb
Lamb (pre '01)
Moving average (Lamb (pre '01))
Steers
Pig
Chicken & other table fowl
Moving average (Chicken & other table fowl)
Liv
esto
ck p
rod
uce
r p
rice
s (d
ead
wei
gh
t £/
kg)
Source: Gira based on AHDB & DEFRA
© Gira 2013 28
UK BF producer price rise … but still respectable cash ‘margin’ for retailers
4. News
1990
1995
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
*0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
UK Beef share of revenue
Processor & re-tailer share
Producer share
Fa
rm t
o r
eta
il s
pre
ad
(£
/kg
)
Source: Gira based on AHDB
Source: Gira based on AHDB & DEFRA
© Gira 2013 29
Similar story for UK lamb … and the cash ‘margin’ should still be attractive for retailers
4. News
1990
1995
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
*0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
UK Lamb share of revenue
Processor & re-tailer share
Producer share
La
mb
fa
rm t
o r
eta
il s
pre
ad
(£
/kg
)
Source: Gira based on AHDB
© Gira 2013GAMC: Singapore Feb’13 30
CN Sheepmeat – A Textbook Case of Supply and Demand
Domestically focused industry
Sustained by traditional minority preference & culture …─ Main meat in NW China─ but spreading to wider China
Per Capita consumption ~3Kg/hd
Degradation of grassland leads to stagnation in production
Imports increasing─ Volume is internationally significant
Chinese Sheepmeat Balance
© Gira 2013GAMC: Singapore Feb’13 31
Retail prices for CN mutton at record levels
Prices have been rising since production stagnated in 2007 Price is getting higher relative to other meats
─ March 2004, Sheepmeat traded at a 34% premium to pigmeat─ By July 2012, Sheepmeat was trading at more than 100% premium to pigmeat
Chinese Retail Meat Prices (US$/Kg)
© Gira 2013
CN sheepmeat production has grown from West to East
GAMC: Singapore Feb’13 32
Top 5 by size
Top 5 by growth
© Gira 2013
… but can China increase production and meet the demand?
Land – But there aren’t any more provinces Seeds – New grass seed varieties could
restore clapped out grasslands Farmers’ switch – Some small dairy
farmers may switch to sheep Finish sheep on concentrates (expensive) Genetic improvement – increasing live
imports from Australia Infrastructure improvements
It won’t be enough!
GAMC: Singapore Feb’13 33
It won’t be enough!
Sheep herders in Shanxi Province
© Gira 2013
Sheepmeat imports rising (steadily?) … before 1Q13 boost
Imports dominated by ─ NZ: 62% of market, up 53% in ’12─ Australia: 37% of market, up 18% in ’12─ Uruguay: sneaking in
GAMC: Singapore Feb’13 34
0
20,000
40,000
60,000
80,000
100,000
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
11
*
20
12
*
Imp
ort
vo
lum
e (
ton
s p
w)
Others
Via HongKong
Uruguay
Australia
New Zealand
Source: Gira from trademap
© Gira 2013© Gira and Asian Agribiz 2013
Storechecks reveal high offal prices and added-value
Fresh Pig Liver Price Chart – January ‘13 Store Type Store/Loc Brand Rmb/kg USD/kg
BEIJING High-end Solana BHG 158.00 25.16BEIJING Mod retail Huapu Pengcheng 39.60 6.31BEIJING Mod retail Wal-Mart 32.60 5.19BEIJING Wet Market Jinsong Pengcheng 20.00 3.18SHANGHAI Mod retail RT-Mart Ai Sun 71.60 11.40SHANGHAI Wet Market Pengpuxincun Ai Sun 59.60 9.49NANJING Mod retail Carrefour Hefei Chunran 27.60 4.39NANJING Mod retail Suguo Sushi 20.00 3.18NANJING Mod retail Suguo Tianhuan 24.00 3.82G'ZHOU Mod Retail Park 'n Shop 23.80 3.79G'ZHOU Mod retail Trust Mart 27.00 4.30G'ZHOU Wet Market Longkoudong 30.00 4.78SU-Anhui Mod retail Suguo 17.80 2.83Average 42.43 6.76Source: Gira survey
Branded fresh liver at Beijing Huapu
Store Type Store/Loc Brand Rmb/kg USD/kgBEIJING Mod retail Huapu Wufu 75.60 12.04BEIJING Mod retail Huapu Tianfu 73.80 11.75BEIJING Mod retail Wal-Mart 71.60 11.40G'ZHOU Mod retail Trust Mart 59.80 9.52SU-Anhui Mod retail Carrefour 36.00 5.73Average 63.36 10.09Source: Gira survey
Cooked Pig Liver Price Chart – January ‘13
Solana BHG Premium Supermarket - Beijing
© Gira 2013 36
Optimistic agenda
1. Global all meats outlook2. Global sheepmeat outlook
EU and UK focus (GMC) China (GAMC)
3. Global beef market context EU beef market situation (GMC) Indian beef outlook (GAMC)
© Gira 2013
2Q13 update
Weaker CN growth rates: but BF demand surprisingly robust Feed cost high, but softened … with better global harvest prospects: still high risk Lower PK producer price rises than expected … but at the high current levels
─ BF: prices firmer than expected – reflecting supply tightness, even with horsemeat scandal Diseases threaten to be more disruptive:
─ Chinese H7N9 is bad: undermining consumer demand for PY: hence lower imports & lower prices … but possible demand transfer to PK, which should be helpful to exporters
─ Mexican H7N3 apparently contained more quickly than Gira expected. Had potential to boost demand for imports from US, and boost US prices
─ Russian ASF situation: contradictory but not clearly under control─ Egyptian H5N1, FMD: situation deteriorating: boosting local prices
Slightly negative political developments : ─ US fiscal problems persist … but economy growing faster than expected ─ Middle East: Syrian civil war worsening─ Eurozone: Cyprus saved from the brink … and contagion still a major risk (but seems better)─ Russia: Ractopamine bans: another NTB in a long line … but in response to weaker RU prices
Smithfield : Shanghui takeover saga: after pressure from ContiGrain: an important, frustrated shareholder seeking break-up into 3x parts, to create more shareholder value
Spectacular Vion retreat from UK … Marfrig retreat … but JBS still buoyant
37
© Gira 2013 38
Monthly Futures MATIF Prices (€/tonne),
Jan. 00 – Apr.13
100
150
200
250
300
350
400
450
500
5502
00
0
200
1
200
2
200
3
200
4
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201
0
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4
(€/t
on
ne
)
RapeseedWheatMaize
Source: GIRA from HGCA
2012/2013 Main Assumptions: High feed costs1Q13 prices have softened more than Gira expected. Still risk
© Gira 2013 39
Cattle Herd by Country 2001-2013: Global flat to slight trend down except in India, AU & AR …. BR cycle turns down?
© Gira 2013 40
Beef & Veal Net Production by Country 2001-2013: further US & EU decline – for different reasons
© Gira 2013 41
Beef & Veal Consumption by Country 2001-2013: Continuous declines in key US and EU markets
© Gira 2013 42
Global Beef & Veal Imports2013: further growth for all major importers
© Gira 2013 43
Global Beef & Veal ExportsIndia fills the supply shortage (from other key exporters)
© Gira 2013 44
Global Beef & Veal Exports: Higher export prices (than domestic) motivate Indian exporters
© Gira 2013 45
Exporter Demand StructureOnly IN (and MX, UY) able to increase significantly their export share
© Gira 2013 46
Producer Prices in current USD/t cwe: General increase (not in BR) but nothing like 2011. Upward 2013 price trend
Figure SYN-BF 9a Cattle Producer Prices, 2001-2013 (current USD/t cwe)
0
1 000
2 000
3 000
4 000
5 000
6 000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
US
EU Male beef R3
RU
EU Cow
AR
UY
AU
BR
© Gira 2013 47
Trends in Beef Export PricesStrongly up in 2011, easing in 2012 and up in 2013
020406080
100120140160180200220240260280300320340360380400420440460480500
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Trends in Trade Prices - Beef Exports, 2003-2013 (legend values for 2011)
EU ch./fr.; 6 023 USD/t cwe
UY processed; 2 871 USD/t cwe
UY fresh/frozen; 4 014 USD/t cwe
BR fresh/frozen; 4 810 USD/t cwe
BR processed; 5 990 USD/t pw
CA to US; 5 677 USD/t pw
AR fresh/frozen; 5 822 USD/t pw
AU FAS to US; 3 942 USD/t pw
NZ to US; 4 294 USD/t pw
US chilled average; 5 755 USD/tpwAU FAS to JP; 5 628 USD/t pw
AR processed; 1 684 USD/t pw
© Gira 2013 48
Trends in Beef Producer prices: 2012 prices increased again after a strong increase in 2011 … tight supply
80
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120
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220
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260
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Pro
du
ce
r p
ric
e i
nd
ex
, c
on
sta
nt
pri
ce
sBeef & Veal producer prices indices, 2001-2013(f) (2001 L.C.)
CHINA
RUSSIA
WORLD
SOUTH AFRICA
USA
E.U.
BRAZIL
AUSTRALIA
Source: GIRA GMC 2012
Based on 2001 producer prices
Weighted (consumption) averages
© Gira 2013 49
Trends in Beef Expenditure: good increase reflecting increasing prices rather than consumption increase
© Gira 2013 50
Changing personal farm revenue stream, with changing politics, prices and evolution of the business
4. News
0%10%20%30%40%50%60%70%80%90%
100%19
91
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
Pro
po
rtio
n o
f re
ven
ue
Revenue segmentation from a mixed English Downland farm
Other revenue
Environmental subsidy
Arable subsidy
Arable Sales
Sheep subsidy
Sheep sales
Cattle subsidy
Cattle sales
© Gira 2013 51
Personal switch from the traditional steers (@22 months) to young bulls (grain fed)
14-15 month young bulls, in standard barn, UK £50k capex cost for barn
45-50 cattle spaces @ 10m2/hd
5-6 month winter Straw bedding Rolled barley & wheat
with soy/rapemeal, molasses & mineral
Young bull:─ 300kg lw weaning
weight @ 8mo─ 650kg lw @
slaughter─ 180 day growing &
finishing─ Implied 1.95kg
DLG─ 370kg cw, 57% kill-
out
© Gira 2013 52
… development of Brazilian feedlots, as a part of their slow intensification
‘Backgrounded’ young Nelore bull, Goias
300m away …the feedlot, 20,000 young bulls
© Gira 2013 53
… and so what does this mean in BR? Opportunity … but still mixed confidence
24 month young bulls, on feedlot, BR Optimistic global meat and beef demand outlook
In a world short of beef, with competition for BR land
Scope for increased production and meat quality ….
More intensive breeding─ grass management─ X-breeding
More intensive finishing
Responding to the varied demands of a portfolio of customers─ Deaf:mute giant!
But … conservative
© Gira 2013 54
EU market context: beef and sheep are minor meats compared with pork and poultry
EU meat production 2001-2013f EU meat imports from 3rd countries 2001-2013f
Eurozone wobble but not crash … and EU enlargement Common Agricultural Policy (CAP). … getting there. overall EU figures mask the dynamic changes between Member States and more
importantly, companies: processor problems, Vion … Doux, BM … Imports from 3rd countries slightly increasing again. Intra-EU trade is much more
important. WTO Doha Round threat disappeared. Some progress on Free Trade Agreements (FTA)
create selective opportunities and threats. Horsemeat scandal
0
10,000
20,000
30,000
40,000
50,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
e
2013
f
Prod
uctio
n ('0
00t c
we)
Sheep
Beef
Poultry
Pork
Source: Gira Meat Club, Dec 12
0
500
1,000
1,500
2,000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
e
2013
f
Impo
rts (
'000
t cw
e)
Pork
Sheep
Beef
Poultry
Source: Gira Meat Club, Dec 12
© Gira 2013
EU Beef Balance: declining consumption and production … in spite of the higher producer prices
GMC : December 2012 55
© Gira 2013 56
EU Cattle prices continue at record levels … helpful for farmers … but tough for processors
Short supply has been dominant story of 2012 prices ( €/t cw) Strong demand for cow beef
GMC : December 2012
© Gira 2013
In fact EU prices continue to firmIn fact EU prices continue to firm
200
250
300
350
400
450
2007 2008 2009 2010 2011 2012 2013
A R3
C R3
D O3
E R3
Source : Member StatesLast Update : Week 19 - 2013
© Gira 2013
550
600
650
700
750
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1.00
0 T
on
ne
s
2 0 1 1 2 0 1 2 2 0 1 3
Beef & Veal Production (E27 Slaughtering) - Tonnes
Source : EStat-Newcronos
EU slaughtering supply is tight … tough for processors
© Gira 2013
441
154
132
500
105
89
0
170
342
1,854
1,886
1,414
441
622
238
87
470
40
0
200
558
170
400
450
416
200
355
353
20
2,525
2,040
1,546
941
727
558
497
487
470
450
416
410
362
355
353
0 500 1,000 1,500 2,000 2,500 3,000
VION (NL)
Danish Crown (DK)
Tönnies (DE)
Bigard Group (FR)
Westfleisch (DE)
LDC (FR)
HK Scan (FI)
Veronesi Group (IT)
Cooperl (FR)
Doux Group (FR)
Plukon Food Group (NL)
Terrena (FR)
Irish Food Processors (IE)
Moy Park (Marfrig) (UK)
Two Sisters Food Group (UK)
Total meat production (' 000 t cwe)
B&V
PG
PY
SH
Source: Gira compilations and estimates
59
The top EU processors are large … but (very) long industry tail … and all face margin pressure
Top 15 EU 27 meat companies by meat production volume ('000 t cwe) - 2010/11
2. Executive Summary
© Gira 2013 60
Top EU processors only just feature in Global top 10: a list which is changing … and not entirely for positive reasons
Major Global Meat Processors
0 2000 4000 6000 8000 10000 12000
JBS
Tyson
Cargill
Smithfield
Marfrig
BRF
Vion
Danish Crown
Linyl Xincheng
Yuron
Next Ten
Approx primary processing volume '000t cwe
Bf
Pk
Py
Sh
Source: Gira '09/10 volumes
adjusted for M&A BF PK PY SH TOTALTop 10 share 23% 14% 13% 1% 15%Next Ten share 4% 3% 4% 0% 3%
© Gira 2013GAMC: February 2013 61
India- Buffalo Export strong growththe mega story of Asian meat exports!
National herd: vast … but growing ─ Buffalo growing at ~3%p.a. (dairy industry)─ Cattle herd growing at 1.8%p.a. despite religious
constraints.─ Ultra-low offtake-rate even allowing for live export
Farmers encouraged to produce better male calves for feeding.. Improving yields
Buffalo is the lowest priced protein, eaten globally by poor.
─ Little / no processed margin possible─ Consumption falling, better prices at export
Export Buffalo strongly up at cost of local market─ Excess sold on domestic market─ Exports will be limited by supply… NOT YET.
Exports price increases as they move better markets & beef prices increase, lifting ceiling…
─ Main destination now Vietnam 28% (269kT pw) of exports… Grew by 164% in 11-12!!
─ Middle East Market slow due to recession, but growing...
─ Other Asian regions increasingly important Soon to be biggest Bovine exporter …. by vol.!!
Indian Bovine Balance
© Gira 2013
Indian bovine slaughtering rates very low
2 key issues with Indian slaughter data:─ It can not capture all informal slaughter─ There is no accounting for live grey
exports to Bangladesh… Cattle protected by Hindu law makes this
very complicated… Buffalo offtake rate is also surprisingly
low… given; ─ High value export markets, ─ Worthlessness of male buffalo calves─ Not protected like cows
GAMC: February 2013 62
Indian Cattle off-take 2000-2013f
Indian Buffalo off-take 2000-2013f
© Gira 2013
Black market export of live cattle to Bangladesh is big business on the 2,400 mile border
Cattle smuggled to Bangladesh are thought to be worth US$920 mio / yr
¾ of cows slaughtered in Bangladesh are thought to come from India… ~150,000 t cwe of production!
Discussion now in India on legalising trade…
BUT strong opposition from Hindu lobby means that there is unlikely to be a change…
In the mean time high numbers of human deaths continue
GAMC: February 2013 63
Cows from as far away as; Rajasthan, Haryana & Punjab
the cattle markets of West Bengal state
Organized gangs buy the cows
Smuggled live to Bangladesh
© Gira 2013
Buffalo Balance: The bovine meat that was the export story of the world in 2012
Buffalo exports have been at the expense of domestic consumption
Pulled by high export prices, which have increased rapidly
The BIG question…
is India running out of capacity to expand Buffalo exports ?
or
can they grow production? There are clearly buffalo calves that
are not making it into the export system… or registering in statistics…─ Potentially 4-5 times the number
recorded in slaughter figures…
GAMC: February 2013 64
Indian Buffalo Balance 2000-2013f
© Gira 2013
Indian Buffalo export prices now ~US$2.90/kg
Value increase driven by price and volume…
Should be capped by: ─ supply ─ Br Bf price
Prices up 200% in 10 yrs Still Cheaper than Brazilian
beef… Exporters gaining access to
higher value markets
GAMC: February 2013 65
Indian Buffalo Export Price 2000-2012Indian Buffalo Export value 2000-2012
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
F. Year
US
$/
kg
© Gira 2013
Indian Buffalo Exports have grown rapidly to a very wide variety of low value destinations
Strong demand in Muslim countries for Halal product Vietnam exports are for China via the grey market … at higher prices
(US$3.11 in ’12 up from US$1.52 in 2007...)
GAMC: February 2013 66
Indian Buffalo Exports, 2000-01 to 2011-12 (t pw)
© Gira 2013
NZ – terrific 1Q13 growth of NZ exports to CN
GAMC: February 2013 67
NZ red meat sector exports to CN
0
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
Val
ue
(NZ
D)
12 Month period to
NZ Meat Industry Exports to China - Rolling 12 Month FOB Value - by Product Type
Beef
Beef offal
Sheepmeat
Sheep offals
Tripe and casings
Tallow
Hides and skins
Source: Compiled by MIA from Statistics New Zealand overseas merchandise trade data
© Gira 2013
NZ BF exports dominated by US, with new CN volume substituting for ID+. More balanced future portfolio
GAMC: February 2013 68
NZ SH sector monthly export vol & prices to UK
0
5,000
10,000
15,000
20,000
25,000
30,000
Monthly beef exports to selected markets by volume (tonnes)
United States Japan Taiwan Korea Canada China Indonesia
Source: Compiled by MIA from Statistics New Zealand overseas merchandise trade data