yemco conference cork 23 – 24 march 2007. the real thing the real thing meat in a changing world...
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Yemco ConferenceYemco ConferenceCorkCork
23 – 24 March 200723 – 24 March 2007
The Real ThingThe Real ThingMeat in a Changing World
YEMCOYEMCO Cork, March 2007
Aidan CotterAidan Cotter
200,000 people per day, 74 million per year and about 371 million over a 5 year period, or nearly the size of all of Western Europe in 2002 Source: UN, World Population Prospects
Population Growth Population Growth
Ageing PopulationAgeing Population
Rising disposable incomesRising disposable incomes
Source HenleyWorld 2006
% agreeing ‘I have all the material things that I need in life.’
67
30
58
29
5754
69
41
19
31
0
10
20
30
40
50
60
70
80
FRA POLUS JAPAUS UKGER IND CHNITA
23
3336 38
43 44 45
05
101520253035404550
Italy France Netherlands UKSpain EU Germany
Source: Study by RAC 2003, published on BBC website
The average commute time (in minutes) across a range of European countries
Commuting timeCommuting time
MigrationMigration
Source: UN Population Division 2006
Projected Annual Net Number of Migrants for major world regions from 2005 to 2050
13701083
103
-455
-804
-1297-1500
-1000
-500
0
500
1000
1500
2000
NorthAmerica
Europe Oceania Africa Caribbean Asia
(thousands)
Retailer power
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
OECD
Non-OECD
Source: OECDSource: OECD
World Beef Production, 2005 – 2015 (m tonnes)World Beef Production, 2005 – 2015 (m tonnes)
Change in the World Meat Market
(Developing)(Developing)
(Developed)(Developed)
““Brazil, India, and ChinaBrazil, India, and China……the new epicentre of forcesthe new epicentre of forces
shaping world agricultural productionshaping world agricultural production and trade”and trade”
World Beef Production to World Beef Production to grow by 2% annually…grow by 2% annually…
40
45
50
55
60
65
70
75
80
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
World Beef Production, 2006 – 2015 (m tonnes)World Beef Production, 2006 – 2015 (m tonnes)
12m tonnes higher by 201512m tonnes higher by 2015
Source: OECDSource: OECD
0
5000
10000
15000
20000
25000
2006 2015
0
5000
10000
15000
20000
25000
2006 2015
0
5000
10000
15000
20000
25000
2006 2015
0
5000
10000
15000
20000
25000
2006 2015
0
5000
10000
15000
20000
25000
2006 2015
0
5000
10000
15000
20000
25000
2006 2015
South America & AsiaSouth America & Asia
driving production growthdriving production growth
Source: OECDSource: OECD
Beef production trends by key suppliers, 2006 – 2015 (m tonnes)Beef production trends by key suppliers, 2006 – 2015 (m tonnes)
However, limited growth in global beef exports…
0
2500
5000
7500
10000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
World Beef Exports, 2006 – 2015 (m tonnes)World Beef Exports, 2006 – 2015 (m tonnes)
Main consumption growth expected in South America and AsiaMain consumption growth expected in South America and Asia
- Satisfied through local productionSatisfied through local production
- Curb export growthCurb export growth
Source: OECDSource: OECD
Global Beef Export TrendsGlobal Beef Export Trends
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Brazil Australia UnitedStates
Canada Argentina India
2006
2015
Global Beef Exports, 2006 – 2015 (m tonnes)Global Beef Exports, 2006 – 2015 (m tonnes)
Source: OECDSource: OECD
Similar trend expected Similar trend expected
in global pigmeat marketin global pigmeat market
60
70
80
90
100
110
120
130
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
World Pigmeat Production, 2006 – 2015 (m tonnes)World Pigmeat Production, 2006 – 2015 (m tonnes)
World Pigmeat Production to rise by 18m tonnes by 2015World Pigmeat Production to rise by 18m tonnes by 2015
World Pigmeat Exports to rise by just over 1m tonnesWorld Pigmeat Exports to rise by just over 1m tonnes
Main consumption growth expected in China, Brazil & USAMain consumption growth expected in China, Brazil & USA
- Satisfied through local production- Satisfied through local production
World Cattle Prices World Cattle Prices
0
50
100
150
200
250
300
350
05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15
EU Average
US Steer
Argentina Steer
Source: OECDSource: OECD
World Cattle Prices, 2006 – 2015 (US$/100Kg)World Cattle Prices, 2006 – 2015 (US$/100Kg)
Stable Consumption Stable Consumption means beef shortfall will means beef shortfall will continue to growcontinue to grow
5,000
6,000
7,000
8,000
9,000
2000 2001 2002 2003 2004 2005 2006 2007 2010 2015
Consumption
Production
EU Beef Balance, 2000 – 2015 (‘000t cwe) EU Beef Balance, 2000 – 2015 (‘000t cwe)
Imports Increasing
0
200
400
600
800
1000
1200
00 01 02 03 04 05 06 07 10 15
EU Beef Imports, 2000 - 2015 ('000t cwe)
EU-15 EU-25 EU-27
Source: GIRASource: GIRA
By 2015, imports to grow to 1 million tonnes
Less change expected in EU Pigmeat market
• EU-27 Pigmeat production to be less than 2% higher by 2015EU-27 Pigmeat production to be less than 2% higher by 2015– All of increase by 2010
– Growth expected in Spain, Germany and some new states
• EU-27 exports to fall by 15% by 2015EU-27 exports to fall by 15% by 2015– Strong competition on world markets
– Solid EU consumption
• EU-27 ImportsEU-27 Imports– Expected to rise, from a very small base
– Key issue will be level of Brazilian access to EU market
• Issues facing sectorIssues facing sector– Production costs and environmental regulations
– Trend in feed prices
WTO: The EU OfferWTO: The EU Offer
-100
-75
-50
-25
0
25
50
75
100
125
150
Beef Pork Poultry
Production
Imports
Exports
Prices
WTO – WTO – Current State of PlayCurrent State of Play
• Efforts to resume “meaningful” talks continueEfforts to resume “meaningful” talks continue
• Some progress made in DavosSome progress made in Davos
• However,However,
– No clear framework for reaching agreement
– US yet to make any further offers
– Fears that EU are willing to concede further on market access
• Deadline end of March – if this is missed it could be 2009Deadline end of March – if this is missed it could be 2009
– US fast track mandate expiring, French elections etc
WTO: WTO: A timeframe to prepareA timeframe to prepare
Export subsidies to be phased out by 2013
Market access remains key issue
Beef imports to grow from 7% to 19% of market
Market prices forecast to fall by 10%
Timeframe uncertain but overall direction increasingly clear
CAP “Health check”CAP “Health check”
• CAP “Health check” announced by CAP “Health check” announced by Commissioner Fischer Boel for 2008Commissioner Fischer Boel for 2008
• Substantive reform not envisagedSubstantive reform not envisaged
• However, potentially efforts to commence process toward compulsory However, potentially efforts to commence process toward compulsory decoupling across Europedecoupling across Europe
• Market signals driving producer decisionsMarket signals driving producer decisions
Bio fuels and feed pricesBio fuels and feed prices
6
14
19
0
24
6
8
1012
14
1618
20
2000 2005 2006(e)
% of US Corn Crop dedicated to Ethanol Production
Source: USDASource: USDA
Climate Change:Food Miles
Agriculture and food now account for nearly 30 per cent of goods
transported on UK roads
The average US grocery store’s produce travels nearly 1,500 miles
between the farm where it was grown and the customers
refrigerator
Animal HealthAnimal Health
-0.64%-0.75%-0.2%-0.4%Impact on GDP
n.a.99%244%158%Costs as % of production value in that year
Taiwan FMD 1997
Netherlands CFS 1997
UK FMD 2001
UK BSE 1996
Source: IMS
Costs of animal disease impacts
The intangible costs?The intangible costs?
“Insanity:
doing the same thing over and over again
…. and expecting different results”Albert EinsteinAlbert Einstein
Segmentation in the Segmentation in the EU Retail Meat MarketEU Retail Meat Market
Fresh Retail Meat Sales by Segment, 2005 (%)
Premium9%
Standard48%
Discount13%
Traditional Outlets
30%
Future Growth Trends Future Growth Trends
(% annual change to 2015) (% annual change to 2015)
• Premium Premium 6% 6%
• Standard Standard 2%2%
• Discount Discount 7% 7%
• Traditional Outlets Traditional Outlets 2% 2%
Source: GIRASource: GIRA
Food Inflation
-1.8
0.51.2
3.2
5
-8
-6
-4
-2
0
2
4
6
% p
ric
e in
cre
as
e
Economy Overall Standard Premium Healthy
Polarisation within offer
UK Beef Market is polarising
% change in price by segment, 2005 - 2006
Food is driving inflation in the UK
- UK food prices growing at a rate of over 5% per annum
““I want to manage or improve I want to manage or improve my health and wellness”my health and wellness”
Consumer LifestylesConsumer Lifestyles
““I like to make smart choices I like to make smart choices when I buy things and want to when I buy things and want to feel I’m getting a good deal”feel I’m getting a good deal”
““I am looking for the real I am looking for the real thing; I care where it comes thing; I care where it comes from and how it is made”from and how it is made”
““I want experiences that help I want experiences that help me get the most out of life”me get the most out of life”
““I need to be able to cope I need to be able to cope with the demands of my busy with the demands of my busy day”day”
““I want to feel good about the I want to feel good about the choices I make and do my bit choices I make and do my bit when I can”when I can”
Quest for health & Quest for health & wellnesswellness
“I want to manage or improve my health and wellness”
Boosting the bodyStrategies to protect against physical illness and disease
Image controlManaging weight and external appearance
Pure and freshBacklash against the interventions of man
Coping strategiesUsing or excluding products
for medical reasons
Skin and hair enhancing yogurt, SpainOrganic Baby Food
Healthy heart chocolate, US
Freefrom…
A New Language in FoodA New Language in Food
nutricosmeticsnutricosmetics
“I am looking for the real thing; I care
where it comes from and how
it is made”
Back to basicsHow things used to be
CraftsmanshipThe human story of the
company or product
TransparencyOpenness of production and
ingredients
ProvenanceWhere things come from
The real thingThe real thing
Making a DifferenceMaking a Difference
“I want to feel good about the choices I make and do my bit when I can”
Sustainable consumptionReducing the impact of my
consumption on the health of planet earth
Fair dealGiving a fair deal to
everyone in the production process
Good causesSupporting a worthy cause
Animal ethicsEnsuring that the animals
are well treated
Adopt a free range chicken
An empty bottle
– fill it with tap water!
Fair trade coffee
Pink & white M&Ms for Breast Cancer Charity
Market Positioning
Irish beef exports2000-2007
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003 2004 2005 2006(f) 2007(e)
United Kingdom
International Mkt.s
Continental Mkt.s
Export Beef DistributionExport Beef Distribution
+18%+18%
+13%+13%
+21%+21%
+18%+18%
51,00051,000
52,00052,000
45,00045,000
45,00045,000
0
50
100
150
200
250
97 98 99 00 01 02 03 04 05 06
Irish Beef exports to continental Irish Beef exports to continental
EU marketsEU markets
Promoting Irish BeefPromoting Irish Beef
"Every morning in Africa, a gazelle wakes up.It knows it must run faster than the fastest lion or it will be killed
...every morning a lion wakes up.It knows it must outrun the slowest gazelle
or it will starve to death.
It doesn't matter whether you are a lion or a gazelle...when the sun comes up, you'd better be running."
The Real ThingThe Real ThingMeat in a Changing World
YEMCOYEMCO Cork, March 2007
Aidan CotterAidan Cotter
Yemco ConferenceYemco ConferenceCorkCork
23 – 24 March 200723 – 24 March 2007