Sustained demand from Asia and the Middle East for beef, lamb and white meats combined with stagnating production particularly in relation to beef and lamb across Australia, New Zealand & South America, and the move towards a richer protein diet by the growing middle class in emerging markets such as China and Brazil, has put strong upward pressure on global meat prices.
However, in developed markets such as the EU, the search for value has resulted in consumers reducing their meat spend, which is impacting on local suppliers. This combined with changes in exchange rates has led to a narrowing of the gap between EU and world prices. Taking beef as an example, as recently as 2006 Brazilian cattle prices in euro terms stood at less than 50% of the weighted average EU-15 price whereas today they stand at over 70% of the EU average.
Meanwhile, the recent jump in grain prices could significantly impact on the viability of intensive meat production systems which rely on cereals for a large proportion of their diet. This is particularly evident in the pigmeat sector where figures from Teagasc suggest that the current average pig feed price in Ireland stands at 91c/kg deadweight. The rise in feed prices follows a sluggish pigmeat market for much of the year, which has left Irish pig prices to date 4% lower than last year.