Trends in Global Protein Markets
Red Meat Sector Conference – Wellington
28 July 2014
Luke Chandler
General Manager New Zealand and Australia
Food & Agribusiness Research and Advisory
Rabobank
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Emerging Market Demand & Market Access
2
Competitiveness Between Proteins
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Supply Chain is Key
Emerging Market Demand & Market Access
Emerging markets drive
consumption
Market Access
Surplus in the west, shortage in east
- Health & safety
- Dietary choices
-Health & safety
- Dietary choices
- Downtrading
- Downtrading
Beef,
pork,
poultry
p/c
SM,beef,
pork p/c
Beef,
SM
pork,
poultry
p/c
Russia
US
EU
Turkey
Iran
- Health & safety
-Uptrading
China
Pakistan
Algeria
-Uptrading
Beef,
pork,
poultry
p/c
Beef,
pork,
poultry
p/c
-Health & safety
- Dietary choices
India
Beef p/c
Brazil
Australia
-Uptrading
All this already on a per capita basis...
New Zealand
Of forecast global meat demand growth,
70% in Asia
China, India and Indonesia consume over 5 bln meals every day
1.000 Tonnes
25,000
20,000
Pork
Beef
Poultry
15,000
10,000
5,000
-
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Evolution of NZ sheep meat trade - 1990
Russia = 5%
UK = 33%
SK = 5%
Japan = 7%
Source: GTA, Rabobank 2014
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Evolution of markets.... 2000
UK = 24%
US = 5%
Ger = 9%
France = 7%
Saudi = 6%
Source: GTA, Rabobank 2014
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China = 4%
In 2013 – Emerging market demand is key
UK = 18%
Ger = 5%
China = 36%
US = 5%
Saudi = 4%
Source: GTA, Rabobank 2014
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A&NZ only 9% Of Total Agri imports
into Asia (by value)
3%
6%
NZ
Aust.
91%
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Rest of World
Market Access is Critical for Exports
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Competitiveness Between Proteins
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Production and feed efficiency
favours white meat over red meat
longer term
Protein Production to Favour Efficient Species
Global production forecast CAGR 2012-2022 compared with 2001-2012
2001-2012 Actual
2012-2022 Rabo
2012-2022 OECD
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Beef
Pork
Eggs
Dairy
Poultry
Salmon
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$US/ton
Price Differences Increasing Between
Protein Species
6,000
5,000
Lamb
4,000
3,000
2,000
Beef
Pork
1,000
Poultry
0
Source: FAO, Rabobank 2014
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China – grain or meat?
China’s Meat Imports (000s MTs)
China’s Grain Imports (000s MTs)
80,000
Soy Meal
1,400
Beef
Soybeans
1,200
Pork
50,000
1,000
Chicken
40,000
800
30,000
600
20,000
400
10,000
200
0
0
70,000
60,000
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
1,600
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Corn
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Supply Chain is Key
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Environment and
social issues will
shape opportunity
and risk
Disease and safety
critical success
factors
F&A supply chains are under more pressure
and becoming more complex
Shifting
market
power and
margins
Commodity
pricing
dynamics
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Feeding 9
billion
people
F&A
supply
chains
The great
cross-over
Fundamental changes in supply chain
relationships are needed
Chain partner
engagement:
From negotiation
To collaboration
Significance of
relationships:
From transactional
To transformational
Source: Rabobank, 2014
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Supply Chain Agreements
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The EU horse meat scandal – one result of
supply chain pressure
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The EU horse meat scandal – one result of
supply chain pressure
• ’To achieve transparency in
our supply chain, we are
therefore undertaking a root
and branch review of how it
works’
Philip Clarke
Group Chief Executive, Tesco
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Disease and safety now priority #1 in China
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Consumer reaction is clear... no matter where they are
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YUM China same-store-Sales, YoY percent
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15
10
5
0
-5
-10
-15
-20
-25
Q12008
25
Q12009
Q12010
Q12011
Q12012
Q12013
Q12014
Social Media - Der Shitstorm
• Live Export
• Palm Oil
• Subway’s Bread
• BRANDS BEWARE
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Pink slime…
yuk factor trumps all the common sense in the world
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As incomes rise the “story” will be key
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Value not Volume – you have a great
brand and story!!
• Disease free
• Food Safety
• Traceability
• Sustainability
• Clean & Green
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Wishing You a Successful 2014!!!!
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Thank you
Luke Chandler
Head of Food & Agribusiness Research and
Advisory Australia and New Zealand
t. +61 2 8115 2217
e. [email protected]
Meet the FAR Australia & New Zealand
research team…
Luke Chandler, General Manager
Hayley Moynihan, Senior Analyst (Dairy)
Michael Harvey, Senior Analyst (Dairy/Farm Inputs)
Marc Soccio, Senior Analyst (Wine, Horticulture &
Rural Economics
Graydon Chong, Senior Analyst (Grains & Oilseeds)
Matt Costello, Analyst (Animal Proteins)
Lloyd Setter, Analyst (Animal Proteins)
A global team of 80 analysts dedicated to delivering insights into the world’s major F&A regions
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