Global meat production: perspectives towards 2020

1
Global meat production towards 2020
Luciano Roppa, D.V.M.
II Winter MSD AH conference Poland, March, 2013
2
AGENDA

• THE PAST and THE PRESENT
• what happened in the last years?
• whats happening today?
• 2. THE FUTURE
• what could happen until 2020?

3
Meat production increased 29 ( 68 million T)
Million T
301,8
234,0
4
We increased our Efficiency ...
 SWINE 2000 2012
Total population, million heads 898,8 964,9 7,3
Total production, million T 89,9 110,8 23,2
 MILK 2000 2012
Total population, million heads 528,6 633,7 19,9
Total production, million T 575,8 737,4 28,1
 BEEF 2000 2012
Total population, million heads 1,313 1,390 5,8
Total production, million T 59,1 66,14 11,8
Fonte Luciano Roppa, 2012
5
US decision to increase Ethanol production from
Corn
6
Multi-year crop shortfalls and low grain stocks
Repeated grain production deficits have reduced
global inventories, leaving them with little
margin for error to meet the challenge of
rising demand.
World Grain Stock-to-Use Ratios,
25-years average
Historical
7
Cereals Low stocks Weather dependent, price
volatility
2012/2013 consumption Actual Stocks Stocks/use in,
CORN, million T 868,1 116,0 13,3
SOYBEAN, million T 262,7 59,5 22,6
WHEAT, million T 684,0 177,0 20,9
There is now no margin for error for world crop
production, with 2013 meat production and meat
pricing highly dependent upon crop growing
conditions.
8
As a consequence, higher and more volatile
prices
CEREALS 156
Volatility Selection
MEAT 79
Source FAO FOOD PRICE INDEX, 2000 to 2012,
DEFLATED
9
Production costs increased margins decreased
US Production cost x Price to Swine producers,
1996 to 2012
10
Production concentration (less producers,
multinational companies)
Global ranking meat companies, (million MT, 2009)
11
Increasing price to consumers .
Commodity Food Price Index Monthly Price - Index
Number
Jan 2003 - Dec 2012 102.42
Source International Monetary Fund, 2013
12
Meat production requirements increased driven
by consumer sensitivity and regulations
Food safety
Health Wellness
Animal welfare
Environment
Sustainability
Traceability
13
AGENDA

• THE PAST and THE PRESENT
• what happened in the last years?
• whats happening today?
• 2. THE FUTURE
• what could happen until 2020?

14
Our World towards 2020
Population growth 75 million people every
year 88 will happen in Asia and Africa
Urbanization growth 3,3 to 4,3 billion 1 billion
people moving to the cities Mostly in Asia and
Africa
Purchasing power growth 40 of the worlds
population now lives in countries with economies
that are growing at 7 annually.
IMPACT - China and India middle class will grow
from actual 400 million people to more than
1,100 billion by 2020
15
IMPACT Meat consumption will grow 19
predominantly in Asia
Meat consumption (poultry, beef, pork and
sheep), 2010 to 2020 (million MT)
2009-11 2020
World 284,48 338,69 19,0
54 million T
Source L. Roppa, 2013 - Based OCDE-FAO
Agricultural Outlook 2012-2021
16
IMPACT future meat consumption
Meat consumption by Species, 2012 to 2020
2012, Kg/person/year 2020, Kg/person/year
PORK 12,3 12,6 2,4
POULTRY 12,9 14,3 10,8
BEEF 6,5 6,9 6,1
SHEEP 1,7 1,8 5,8
TOTAL 33,4 35,6 6,6
FISH 18,9 19,4 2,6
Source L. Roppa, 2013 - Based OCDE-FAO
Agricultural Outlook 2012-2021
17
Our World towards 2020
Water Worlds water needs will grow by 15 over
the next 10 years Water scarcity is a global
phenomenon, but will affect more Asia and Africa.
Arable Land Land available for agriculture is
declining From 0,50 Ha of arable land per person
in 1950 to 0,25 Ha in 2010.
IMPACT Sources of growth in crop production to
meet Global food needs by 2050
Yields Crop intensity Area expansion
World 77 14 9
Source OCDE FAO, 2010
18
Our World towards 2020
ENERGY World primary energy will grow by 20
over the next 10 years Developing economies drive
Energy consumption growth (30 higher than today)
IMPACT By 2020 - 12 of the global production
of Coarse Grains will be used to produce Ethanol
- 16 of the global production of Vegetable Oils
will be used to produce Biodiesel
Biofuels production growth, 2010 to 2020
2010 2020 Growth,
Ethanol, million liters 99,4 154,9 55,8
Biodiesel, million liters 19,8 41,9 111,6
Source L. Roppa, 2011 - Based OCDE-FAO
Agricultural Outlook 2011-2020
19
IMPACT Food Price volatility
Feed costs are likely to remain high and volatile
Soybeans Monthly Price - US Dollars per Metric Ton
500
370
250
Corn Monthly Price - US Dollars per Metric Ton
260
180
100
Source L. Roppa, 2012 - Based on Index
Mundi, Oct. 2012
20
ACTIONS

• - Produce more
• (growth in population and purchasing power)
• Better
• (food safety, animal well-being and
  sustainability)
• With less resources
• (less land, water, labor, energy higher prices)
• At a lower cost
• (huge population with small income)
• With technology
• (research, innovation )

Pig farm, Mato Grosso, Brazil
21
Actually, we are producing enough food to
provide at least 2,800 Kcal/person/day
Kg/person/year
CEREALS 165,0
ROOTHS AND TUBERS 69,4
OILSEEDS (oil eq.) 12,0
MEAT 41,4
MILK (fresh milk eq.) 99,6
FISH 17,2
SUGAR 23,6
Kcal/pessoa/dia 2.800
Source Luciano Roppa, based in data of OECD/FAO,
2010.
22
But, one-third of the food produced for human
consumption, gets lost or wasted globally
CHALLENGE Reduce Food losses
Current Food losses Meat 20 Cereals 30
Which is about 1.3 billion ton per year
23
and we still have not solved the problem of
world hunger.
Due to social, logistic and economic problems, we
still have 1 billion people underfed
1,0 Billion Underfed
1,3 Billion Overweight
Source WHO (World Health Organization).
24
ACTIONS increase meat production
Meat production growth 2010-2020 18,9
2009-11 Million T 2020 Million T Quantity Million T
World 286,06 340,41 54,35 18,9
DEVELOPED 109,98 120,29 10,31 9,3
DEVELOPING 176,06 220,12 44,06 25,0
poultry, beef, pork and sheep
Source L. Roppa, 2013 - Based OCDE-FAO
Agricultural Outlook 2012-2021
25
Where meat production will grow?
2009-11 (million T) 2020 (million T) Growth,
World 286,06 340,41 18,9
1 - China 76,97 92,96 20,7
2 - EU 27 43,52 44,98 3,3
3 - USA 40,75 45,52 11,7
4 - Brazil 25,47 31,18 22,4
5 - Russia 7,09 9,47 33,5
6 - India 6,42 9,07 41,3
7 - Mexico 5,71 7,07 23,8
63
Source L. Roppa, 2013 - Based OCDE-FAO
Agricultural Outlook 2012-2021
26
ACTIONS Poultry production growth
Projected worlds growth, 2010 to 2020 2,6 per
year
POULTRY, million T 2009-11 2020
WORLD 98,670 124,368 26,0
Main producers 61
USA 19,024 22,098 16,1
China 16,830 23,185 37,7
Brazil 12,544 16,131 28,5
EU-27 11,879 12,472 5,0
Source L. Roppa, 2013 - Based OCDE-FAO
Agricultural Outlook 2012-2021
27
ACTIONS Fish production growth
Projected worlds growth, 2010 to 2020 1,2 per
year
FISH, million T 2009-11 2020
WORLD 149,287 167,557 12,2
Of which aquaculture 58,979 76,428 29,5
DEVELOPED 31,519 32,064 1,7
DEVELOPING 117,768 135,493 15,0
Source L. Roppa, 2013 - Based OCDE-FAO
Agricultural Outlook 2012-2021
28
ACTIONS Beef production growth
Projected worlds growth, 2010 to 2020 1,5 per
year
BEEF, million T 2009-11 2020
WORLD 65,631 75,538 15,0
Main producers 53
USA 11,505 12,284 6,8
Brazil 9,685 11,305 16,7
EU-27 8,197 8,138 -
China 5,615 6,300 12,2
Source L. Roppa, 2013 - Based OCDE-FAO
Agricultural Outlook 2012-2021
29
ACTIONS Pork production growth
Projected worlds growth, 2010 to 2020 1,5 per
year
PORK, million T 2009-11 2020
WORLD 108,631 124,877 14,9
Main producers 80
China 50,564 59,205 17,0
EU-27 22,551 23,556 4,4
USA 10,140 11,154 10,0
Brazil 3,237 3,663 13,1
Source L. Roppa, 2013 - Based OCDE-FAO
Agricultural Outlook 2012-2021
30
ACTIONS Milk production growth
Projected worlds growth, 2010 to 2020 2,0 per
year
MILK, million T 2009-11 2020
WORLD 711,561 859,485 20,7
Main producers 56
EU-27 148,991 157,415 5,6
India 116,815 160,361 37,3
USA 87,407 102,239 17,0
China 42,773 59,040 38,0
Source L. Roppa, 2013 - Based OCDE-FAO
Agricultural Outlook 2012-2021
31
ACTIONS Who will Export?
Main meat exporters, 2020 (million MT)
Beef Pork Poultry Total
1 - Brazil 2,325 0,761 5,171 8,257
2 - USA 1,444 2,577 3,702 7,723
3 - Canada 0,912 1,399 0,196 2,507
4 - EU-27 0,138 1,459 0,898 2,495
World 10,457 7,568 12,526 30,551
Source L. Roppa, 2012 - Based OCDE-FAO
Agricultural Outlook 2011-2020, July 2011
32
ACTIONS Who will Import?
Main meat importers, 2020 (million MT)
Beef Poultry Pork Total
1 - USA 1,896 0,048 0,696 2,640
2 - Japan 0,770 0,343 1,114 2,227
3 - Mexico 0,377 0,858 0,559 1,794
4 - EU-27 0,635 0,883 0,037 1,555
5 - Russia 0,790 0,802 0,102 1,694
World 9,873 12,512 7,151 29,536
Source L. Roppa, 2012 - Based OCDE-FAO
Agricultural Outlook 2011-2020, July 2011
33
Production Surplus Deficit
Surplus
Deficit
34
OUR CHALLENGE
EFFICIENCY
More food must be produced sustainably, through
the spread and implementation of existing
knowledge and by the investment in technology
and innovation
35
THE GENETIC CHALLENGE
The genetic selection linked to nutrition, is
likely to change in favor of genotypes capable
of being productive in a range of commercial
environments
2010 2020
SWINE SWINE SWINE
Piglets/sow/year 28 35
Meat(kg) / Sow / Year 2500 3500
Feed conversions of under 21 at 130 kg finished weights Feed conversions of under 21 at 130 kg finished weights Feed conversions of under 21 at 130 kg finished weights
DAIRY CATTLE DAIRY CATTLE DAIRY CATTLE
Milk production, EMC 7.250 10.500
Age at first farowing, months 28 25
Source Luciano Roppa, 2012 based in Genetic
companies data.
36
The production systems
The future belongs to the efficient and the
productive.

• Consolidation will be faster in the next 10
  years
• Trend towards vertical integration will
  continue.   Today, 25 of the swine industry
  worldwide is already integrated
• Integration is the most successful current model
  for sustainability     - Controls all the input
  raw material,     - Controls the processes at
  each stage of production,     - Takes advantage
  of economies of scale.

37
The production systems
Independent producers will have to form
alliancesto achieve economies of scale or fill
market niches(such as "free of antibiotics",
"organic", "local market ', etc.).
Organizational models for independent pig farmers
Pig farm, Mato Grosso, Brazil
38
CHALLENGE Food Safety improvement
Over the past 15 years, laboratory
equipmentsdeveloped detections from ppm (parts
per million)to ppq (parts per quadrillion)
Additional legislation will affect the feed
sector, including environmental protection, feed
hygiene and food-safety issues
Companies will only source feed, ingredients
additives from suppliers with world-class food
safety practices.
39
Main targets in Reproduction are
CATTLE
SWINE

1. Average of 30 pigs sold per sow/year
2. Increasing utilization of intrauterine
   insemination
3. Trend to use Sexed semen and Embryos transfer
4. Tools to more accurately indicate estrus and
   ovulation, occurrence of fertilization,
   establishment of pregnancy, the number of fetuses
   and time of farowing
5. New tools to detect hormones at estrus will
   enable the Precision artificial insemination

1. Sperm Sexing
2. Genetic markers (to improve selection process)
3. Fixed Time Artificial Insemination - TAI
4. New plan of herds health, due to the risk of
   occurrence of infectious diseases at higher
   densities
5. Fiber digestibility / methane reduction
6. Food traceability by molecular tracking (what,
   where and when animals were fed)

40
CHALLENGE Formulation and Ingredients
FACT Raw material will increase their prices and
some of them will be less available IMPACT
Search for local and cheaper raw material
alternatives

• ACTIONS
• A more efficient conversion of by-products (rich
  in NSP) into high quality food will remain a top
  priority area of research in the future (enzymes)
• Increasing usage of synthetic forms of essential
  Amino Acids
• to reach the ideal protein concept
• Greater accuracy in dietary nutrient provision
  (NIR)
• to avoid nutritional losses
• Feed processing (particle size and heat
  treatment)
• Precision nutrition

41
CHALLENGE new Additives generation
The restricting or even banning of anti-infective
is likely to continue ... Growing demand for
nutritional ideas, technologies and additives
that improve feed efficiency
Organic Minerals
Mycotoxin Binders
Immune stimulators
Synthetic Amino Acids
Enzymes
Anti Oxidants
Prebiotics (MOSS)
Probiotics
Essential oils
Acidifiers
42
Animal production will suffer a strong pressure
to reduce gas emission
Livestock is responsible for 18 of greenhouse
gas emissions Poultry meat has the least impact
on the environment per kg of meat produced
Source IMPRO, 2008 - Elaboration Luciano
Roppa 2009
43
Improve efficiency is essential to lower
Emission
Kg of meat produced per sow/ year, 2009
Source Steffen Klenk, PIC Canada Ltd., 2010
44
ENVIROMENTAL IMPACT
Strong shift emphasis from treating manure as a
waste, to recognize it as a resource!
Use in land application, due to rising
commercial fertilizer prices
Increasing composting, to reduce odors and make
it more economical to transport
Facilities will increasingly use alternative
sources of energy, such as biodigestors.
45
PEOPLE the most important asset!

• Success in this area will overcome all other
  obstacles
• The biggest challenge will be to find highly
  qualified people to do the high level of work
  that the industry demands.
• Process control will centralize and be staffed
  with the most intelligent and experienced
  stockmen available.

46
Are you, as a Leader, ready for these changes?
47
Thank you for your attention!
Email Lroppa_at_uol.com.br Phone [phone]
09 Address Rua Araca, 567 13.098-379
Campinas Sao Paulo, Brazil