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Meat Industry Overview South African Feedlot Association Annual General Meeting 9 March 2010

Meat Industry Overview South African Feedlot Association Annual General Meeting 9 March 2010. David Spies . Contents. International trends Production Consumption Trade Price trends Domestic trends Production Consumption Trade Price Feedlot Short term perspective Scenario’s

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Meat Industry Overview South African Feedlot Association Annual General Meeting 9 March 2010

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  1. Meat Industry OverviewSouth African Feedlot AssociationAnnual General Meeting9 March 2010 David Spies

  2. Contents • International trends • Production • Consumption • Trade • Price trends • Domestic trends • Production • Consumption • Trade • Price • Feedlot • Short term perspective • Scenario’s • Challenges

  3. International trends

  4. Beef and veal: Production SA 685 Source: FAPRI, 2010

  5. Beef and veal: Production Source: OECD FAO, 2010

  6. Beef and veal: Consumption SA 836 Source: FAPRI, 2010

  7. Beef and veal: Consumption Source: OECD FAO, 2010

  8. Overall increase in per capita meat consumption between the 2007-09 period and 2019 Source: OECD FAO, 2010

  9. Beef and veal: Per capita consumption SA 17.23 Source: FAPRI, 2010

  10. Beef and veal: Per capita consumption Source: OECD FAO, 2010

  11. Imports 2009 Source: ITC, 2011

  12. Exports 2009 Source: ITC, 2011

  13. Beef and veal: Imports Source: OECD FAO, 2010

  14. Beef and veal: Exports Source: OECD FAO, 2010

  15. International meat price index Source: FAO, 2011

  16. International meat price indexes Source: FAO, 2011

  17. International beef prices Sources:S.A.G.P.y A. (Secretaría de Agricultura, Ganadería, Pesca y Alimentos), A.L.I.C. (Agriculture & Livestock Industries Corporation), U.S.D.A. : U.S. trade exports

  18. Local trends

  19. Local trends: Beef production and consumption Source: BFAP, 2010

  20. South African meat consumption Source: BFAP, 2010

  21. South African meat consumption FAPRI, 2010 Beef 21% Chicken 27% 59% 4% 24% 23% Source: OECD FAO, 2010

  22. Per capita beef consumption vs per capita disposable income 15-16 kg/year Source: SARB & DAFF, 2010

  23. Per capita sheep consumption vs per capita disposable income Source: SARB & DAFF, 2010

  24. Imports: Beef 2009 Source: ITC, 2011

  25. Exports: Beef 2009 Source: ITC, 2011

  26. Imports: Live cattle 2009 Source: ITC, 2011

  27. Exports: Live cattle 2009 Source: ITC, 2011

  28. SA Beef vs calf prices: Long term Source: BFAP, 2010

  29. Local beef price trends: Nominal Good conditions: Rainfall Low maize price Low supply of weaners HOWEVER Winter on the way Supply A2A3 carcass will increase Decreasing price Source: AMT, 2011

  30. Local beef price trends: Real (CPI:2008=100) Source: AMT, 2011

  31. Weaner:A2/A3 beef carcass price ratio Source: AMT & GrainSA, 2011

  32. Provincial price variation A2/A3 B2/B3 Weaner C2/C3

  33. Local price trends: Lamb/mutton: Nominal Source: AMT, 2011

  34. Local price trends: Lamb/mutton: Real (CPI:2008=100) Source: AMT, 2011

  35. Feedlot prospects & scenario’s

  36. Feedlot margins Source: Calculations based on: AMT & GrainSA, 2011

  37. Maize price trends Source: GrainSA, 2011

  38. Feedlot prospects: Weaner & beef price changes Net negative effect 6.3% Source: Calculations based on: AMT, 2011

  39. Feedlot scenario’s (economic vs management factors) *Weaner price – Feb 2011 A2/A3 price – May-June 2011 Yellow maize Feb- May 2011 Calve: Carcass price ratio of 0.66 Source: Calculations based on: AMT & GrainSA, 2011 and own estimations

  40. Primary production Processing/wholesale & retail Cattle marketing in the FS • Agents • Adult female (14%) • Young females (33%) • Bulls (5%) • Castrated males (24%) • Calves (14%) 70% • Auction system • Adult female (11%) • Bulls (5%) • Castrated males (6%) • Calves (7%) • Feedlot • Adult female (7%) • Young females (33%) • Bulls (5%) • Castrated males (18%) • Calves (49%) Wholesale/deboning Retailer • Abattoir • Adult female (51%) • Bulls (35%) • Castrated males (41%) • Calves (21%) • Butchery • Adult female (6%) • Bulls (5%) • Castrated males (12%) • Calves (2%) • Commercial farms • Adult female (10%) • Young females (33%) • Bulls (45%) • Calves (7%) Producers Source: Spies, Jooste & Taljaard, 2011

  41. Primary production Processing/wholesale & retail Lamb marketing in the FS • Agents • Adult female (10%) • Young females (17%) • Breeding rams (6%) • Castrated males (27%) • Lambs (8%) 46% • Auction system • Adult female (9%) • Breeding rams (11%) • Lambs (2%) • Feedlot • Adult female (9%) • Young females (17%) • Breeding rams(11%) • Castrated males (6%) • Lambs (36%) Wholesale/deboning Retailer • Abattoir • Adult female (40%) • Young females (50%) • Breeding rams (28%) • Castrated males (45%) • Lambs(41%) • Butchery • Adult female (9%) • Castrated males (9%) • Lambs(5%) • Commercial farms • Adult female (9%) • Breeding rams (44%) • Lambs(2%) Producers Source: Spies, Jooste & Taljaard, 2011

  42. Challenges Big responsibility for food industry: Feed the world & offer more from less 6.8 billion – in the last 50 years the population has more than doubled 9 billion – forecast global population in 2045 100% – growth in global demand for meat by 2050 100% – growth in meat consumption in China in the past 15 years Source: Korver 2010

  43. Challenges…. Environment Animal welfare Quality Now Future Sustainability Productivity Production Changing demand and prioritiesSwitch from productivity focused model to food safety & sustainable business model Source: Korver 2010

  44. Challenges… • Information availability • Product flow, Financial flow, Information flow at every level of the value chain • Producers • Commercial • 60 – 70 % non-official • 20 – 30 % official • Developing • 80 % no source of information • 10 % official • 10 % non official • Processors • 100% non-official • Retailers • 100% non-official Production practices Input use Animal health issues Markets (physical) Prices Product standards Traceability Risk management Source: Spies, Jooste & Taljaard, 2011

  45. Challenges… • Stimulate local demand • Educate consumers • Quality • Guaranteed safety • Palatability/eating experience • Experiencing the same eating quality when purchasing a piece of red meat periodically from the same place with the same preparation method. • Nutritional information, preparation methods/packaging • Increase local supply • Productivity of the emerging and developing producers • Commercial producers • Calving percentage (80%) and off-take rate (33%) • Lambing percentage (93%) (and off-take rate (35%) • Developing producers in the FS • Calving percentage (30%) and off-take rate (12%) • Lambing percentage (13%) and off-take rate (2.3%) International beef off-take rates AUS 28% NZ 37% EU 34% US 38% ARG, BRA, UR, PAR 20% Scholtz & Bester, 2008) Source: Spies, Jooste & Taljaard, 2011

  46. DankieThank you David Spies David.Spies@nwu.ac.za 018 299 2373

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