, Redacción: Carlos D’Elía and Alejandro Ramos

The Recent Dynamics of the Global Meat Trade

By Federico Mazzella ,
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International trade in meat products has grown in recent years.

While the growth in global meat production has stabilized (and even shows some signs of stagnation)[1], trade in these products is growing at a higher rate than that of global trade in general (figure 1).

Figure 1. Global Trade in Meat, 2000–2017
(Indexes, 2010=1000)

 Nota: El comercio de carnes corresponde a los flujos físicos exportados y el comercio mundial total a una estimación a precios constantes de 2010. Las cifras de 2017 son proyecciones. Fuente: Elaboración propia con cifras del Departamento de Agricultura de EE.UU. y de la Oficina Holandesa de Análisis de Política Económica (CPB).

Note: Trade in meat represents the physical trade flows that were exported. Total global trade is an estimation at constant 2010 prices. The figures for 2017 are projections. Source: Prepared by the authors using data from the US Department of Agriculture and the Netherlands Bureau for Economic Policy Analysis (CPB).

In the run-up to the global financial crisis (2001–2007), global trade volumes grew at a rate of 5.7% per year, while exports of the meat products included in this analysis grew at a similar rate, 5.4% per year on average. The sharp downturn in global trade after 2010 brought growth rates down to around 2.4% (2011–2017 average).[2] Although the trade in meat has also been affected by the lethargic evolution of trade in recent years, it has still grown at 3.5% per year, which outstrips the average for global trade in general.

It is interesting to observe that this behavior is linked to a growth in the share of production that is channeled through international trade (figure 2).

Figure 2. Export Share in Production, by Meat Type, 2000–2017

(In percentages).

2

Source: Prepared by the authors using data from the US Department of Agriculture

 

Since the year 2000, there has been a sustained increase in the export share of production for all three meat types. Beef production is on the brink of contraction; however, it is the meat product that is most likely to be exported—in 2017, nearly 16% of total beef produced was sold on the international market. Poultry also has an export coefficient that is above 10%, while pork is the least traded of the three, although it accounts for the greatest share in production.

These differences may be explained by how difficult it is to obtain these products on the domestic market, given each country’s natural resource endowments. One interesting case is that of China: although it imports pork, it seeks to produce this on the domestic market and makes up for its lack of resources for doing so by importing raw materials such as soybeans. In this case, potential meat imports are replaced by imports of a commodity to manufacture protein concentrates, as domestic inputs for this sector are limited.

The Beef Market

On the exporter side, most of the beef market is split between two groups: one made up of emerging countries and the other of advanced economies (figure 3). The latter includes countries from South America (Argentina[3], Brazil, Paraguay, and Uruguay), which account for nearly 30% of global exports. India’s share is now at 19%, which makes it a major beef exporter. The developed country share combines a relatively low contribution from the United States and the European Union (16%) with that of three developed economies that specialize in natural resources, Australia, Canada, and New Zealand. These countries’ beef exports account for 27% of the global market, a similar figure to that of the South American countries.

More advanced countries play a much more significant role as importers than as exporters: the United States and the European Union together account for 23% of purchases. If Japan and the Republic of Korea are included in this list, 39% of global demand for beef is accounted for. The second-largest importer is made up of a group of emerging economies: China (including Hong Kong), Russia, and Egypt represent 27% of global imports.

In other words, this is a market that is essentially supplied by emerging countries (in South America and India), as well as Australia, Canada, and New Zealand, all of which together explain 72% of export supply. More advanced countries play a more minor role as suppliers. In contrast, these are the main drivers for demand, along with a handful of emerging economies, notably China, which also accounts for a sizeable share.

Figure 3: Markets of Origin and Destination Markets for Trade Flows in Beef, 2016

(In percentages).

 

Exports

                                      3

    Imports4

Source: Prepared by the authors using data from the US Department of Agriculture.

The Pork Market

Unlike the beef market, an appreciable share of pork exports come from advanced countries (figure 4). The United States and the European Union dominate the market, accounting for 66% of sales, a share that goes up to 82% if Canada is also included. Brazil is also a pork exporter but accounts for just 10% of the total.

The most significant importer is China (including Hong Kong) with 33% of the share. China has not managed to cover its domestic consumption, despite being the number one global producer. Including two other Asian importers (Japan and the Republic of Korea) in this group explains 58% of global demand for pork, which occupies a prominent position in these countries’ preference structures. Mexico is a significant buyer, accounting for 13% of the global total.

Figure 4: Origins of and Destination Markets for Trade Flows in Pork, 2016

(In percentages).

Exports

5

Imports

6

Source: Prepared by the authors using data from the US Department of Agriculture.

 

The Poultry Market

Although the United States and the European Union account for 40% of sales in this market, Brazil has achieved a similar position, representing 36% of total sales (figure 5). Purchaser countries are much more scattered, which is possibly due to the more widespread preference for poultry meat.

Figure 5. Origins of and Destination Markets for Trade Flows in Poultry Meat, 2016

(In percentages).

Exports

7

Imports


8

Source: Prepared by the authors using data from the US Department of Agriculture.

 

Conclusions

Running against the trend toward a certain cooling off in the productive expansion of the meat sector, global trade in meat products is growing at a higher rate than global trade in general. Beef and poultry have the highest export coefficients.

Very different supply and demand patterns prevail in each of these markets. While Latin American countries are significant suppliers of beef, more advanced economies continue to dominate pork exports. Brazil has made successful inroads into the poultry market, but it still plays a much lesser role than developed countries.

[1]See the article ‘Global Meat Production: The Nutrition Transition and the Key Role of Emerging Countries,’ also in this issue of INTAL Connection.

[2] Giordano and Ramos. 2016. Downshifting. Latin America and the Caribbean in the New Normal of Global Trade.

[3] In 2016, Argentina accounted for 2% of global beef exports..

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