Global Market Trends and Challenges
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1 Global Market Trends and Challenges Northern Ireland Poultry Industry Conference 2 nd November 2017 Gary Millar, International Business Development Manager (Asia)
2 Global Market Trends & Challenges: Global Market Production & Consumption Trends Evolution of Global Farm Structure Global Market Trade Global Market Developments & Challenges
3 000's MT KG's EU 28 Egg Consumption EU Egg consumption recovery since 2012 Global Production rising by 2-2.5% per year from EU Consumption 13kg per capita , , , ,000 4,000 3, , e 2015f 2016f Production Consumption Per Capita Consumption Source: Watt Global Media 2016
4 Global Meat Consumption Projections by type Kt's Kgs/person Poultry Most Consumed % by Beef &Veal Pigmeat Poultry Meat Sheep Meat Per Capita Consumption Source: OECD 2017
5 World Broiler Meat Production & Consumption 2017 Annual % Production Growth Annual % Consumption Growth PRODUCTION CONSUMPTION USA 21% USA 18% Other 39% Total 91,278 (1000 mt s) Brasil 15% Other 48% Total 88,135 (1000 mt s) China 13% EU 13% China 12% Brasil 9% EU 12% Source: AVEC Annual Report 2017; USDA 2017
6 Chicken Meat Consumption in Select Countries 2010 to 2016 Kg's/capita/year UK 23.2KG s Australia 46.0KG s Ireland 30.4KG s* Iran India China Brasil Australia Argentina United Kingdom Portugal Netherlands Italy Germany France Austria USA UAE South Africa Mexico Japan Source: AVEC 2017; ABARES 2017 * 2014 AVEC
7 Projected Change in Poultry Consumption USA -44.5kg +10.8% Colombia -22kgs +23.8% EU 21.6kg +7.1% Brasil 38.7kgs +9.3% Ukraine 23.4kg +28.7% India 1.8kgs +20.1% Tanzania 1.0kg +21.2% China -11.4kg +23.8% Vietnam 12.7kg +36.9% Indonesia -6.3kg +15.8% Source: ENSIA 2015,
8 Countries with the greatest share of additional poultry production 2025 vs Brazil United States China European Union Mexico India Russia Indonesia Argentina Pakistan Brasil, USA and China continue to dominate Vietnam Poultry (x 1 million metric tons, rtc or cwe) Source: Watt Global Media 2016
9 N.I Poultry Numbers Poultry Numbers in UK and N. Ireland (millions) (a) UK Poultry Numbers UK 1.7% since 2000 NI 41.7% since 2000 UK Chicken Meat 30% since Northern Ireland United Kingdom Source: DEFRA 2016
10 000 S Tones Carcass Weight Top 10 EU Poultry Producing Countries Axis Title Source: AVEC Annual Report 2017
11 Global Market Trends & Challenges: Global Market Production & Consumption Trends Evolution of Global Farm Structure Global Market Trade Global Market Developments & Challenges
12 Broiler Farms in England and Wales by Size 1971 & % % 1971 < % % % % % % % Source: Richardson "UK Poultry Industry " Source: DEFRA 2015 Clear trend for fewer but larger farms
13 Broiler Farms in Northern Ireland by size % <1000 1% % % % % Source: DAERA % of broilers grown on farms with 50K or more birds
14 House Design Evolution in Asia Indonesia
15 House Design Evolution in Asia Indonesia
16 House Design Evolution in Asia Indonesia
17 House Design Evolution in Asia China: Slat system
18 House Design Evolution in Asia China: Floor System 18
19 House Design Evolution in Asia China: small family slatted Small family farms: trend for closure due to environmental pressures and air pollution from coal fire heating 19
20 Global Market Trends & Challenges: Global Market Production & Consumption Trends Evolution of Global Farm Structure Global Market Trade Global Market Developments & Challenges
21 000 S TONNES Broiler Imports in Top 10 Countries Strong Japanese Import Growth Japan Mexico Saudi Arabia EU Iraq South Africa China Hong Kong UAE Cuba 11% China Imports increasing from Latin America % 9% 8% 7% 6% 5% 400 4% S. Africa imports reduced by embargo Source: USDA % 3%
22 000 S TONNES Broiler Exports from Top 10 Countries Brasil, US and Thailand increasing China HPAI embargoes continue to impact US EU Utilising Domestic Production % 28% 11% 7% 18% Brazil USA EU Thailand China Turkey Ukraine Argentina Belarus Canada Russia Others Source: USDA 2017
23 Global Market Trends & Challenges: Global Market Production & Consumption Trends Evolution of Global Farm Structure Global Market Trade Global Market Developments & Challenges
24 Meeting Basic Consumer Expectations Quality of the product in all respects Fresh meat produced at an acceptable price Food Safety and Traceability Basic consumer requirements for standard chicken meat products
25 Modern Consumer Expectations Evolving welfare standards and diversification Minimal use of Anti-microbial treatments Sustainable production The expectations of the modern consumer, particularly in mature markets, have evolved from the basic expectations of the past, bringing opportunities and challenges to industry.
26 Antimicrobial Stewardship examples of developments in Asia Pacific Thailand: Banned the use of antimicrobial growth promoters in started a 5 year plan to reduce use by a further 30% Indonesia: Animal drugs commission recommends to limit use of AGP s. Authorities passed a law prohibiting use of feed with AGP s, one exception plus anti-coccidials China: Announced it will join the EU and ban use of antimicrobial growth promoters Australia: Late 2016 published First National Antimicrobial Resistance Strategy Will ensure evidence based best practice in antimicrobial stewardship. South Korea: Only Asia Pacific country to completely ban antibiotics as growth promoters in feed in 2012 Vietnam: April 17 announced it will ban the use of AGP s for food safety reasons. By 2020 Prophylactic use will be stopped New Zealand: Launched National Antimicrobial Resistance Action Plan in August Source: Daniel Ramirez & Tim Goossens, July 2017
27 A Global Broiler Market. Which develops and differentiates continuously Conventional ( Technology ) High Technical level Maximum investments Possible solutions to developments in the broiler market Optimization of costs Maximization of Quality, Welfare, Health, Environment Alternatives ( Quality/Welfare ) Differentiation Robustness, Reliability Tradition & Quality Welfare
28 Conventional Systems: Less Room for Errors in Technical Management at any stage Skilled, Professional & Motivated Staff essential in ensuring success! Hatchery -Incubation=40% of chicks life by No room for deviation from ideal incubation parameters Breeder -Growth and uniformity in Rear and increasing challenge -No room for error with separate sex feeding Broiler -achieving 7 day weights critical! -7 hrs equipment failure = 1% life - Little room for compensatory growth -
29 % of Total UK Egg Supplies by Layer Housing Type An indicator of future meat trends? Egg market may give indication of future Trend toward Welfare Systems Small Niche Organic Market Enriched cage Barn Free range Organic Source: Watt Global Media 2016
30 Alternatives: A quickly evolving diverse approach to chicken production EU Concepts France Netherlands USA Others EU Directive 2000/13/EC 81days: Traditional Free Range/Total Freedom FR 56 days : Free Range & Extensive Indoor Organic Standard Label Rouge- 80days+ Certified Regional Poulet de Bresse Organic Standard 2007 Beter Leven 3 star system 2013 Chicken of Tomorrow Global Animal Partnership Commitments to move to slow grow by 2024 UK RSPCA Assured Germany Tierschutzlabel (2 step Stufe ) Australia -RSPCA Farm Assurance Scheme Global roll-out of fast food strategies e.g. McDonalds
31 USA Perspective : +35%/year
32 1. Global Industry Trends Illustrate the success and potential for further growth 2. HPAI Remains a major global bio-security threat with associated trade risks 3. Genetics and Management Advances have facilitated much improved growth and FCR Thank you very much for your attention! 4. Conventional Performance Improved ADG and reduction of antimicrobials leaves little room for management errors 5. Customer expectations Leading to increased diversification on the basis of taste and welfare
33 Disclaimer The performance data contained in this document was obtained from results and experience from our own research flocks and flocks of our customers. In no way does the data contained in this document constitute a warranty or guarantee of the same performance under different conditions of nutrition, density or physical or biological environment. In particular (but without limitation of the foregoing) we do not grant any warranties regarding the fitness for purpose, performance, use, nature or quality of the flocks. HUBBARD makes no representation as to the accuracy or completeness of the information contained in this document.
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