The global meat industry, according to Grand View Research, is currently valued at nearly $1.3 trillion, and is expected to continue to grow at a CAGR of 2.5% till 2030. While trends are changing in this trillion dollar industry, which we'll discuss later on, it is still expected to be a really important market especially in developing countries as their population continues to grow, which is very important for some of the biggest meat producing countries in the world.
After the Covid-19 pandemic hit, the meat industry saw its prices decline while global supply chain gaps and reduced household spending saw meat demand fall, which in turn had a negative impact on some of the biggest meat importing countries excluding China, which despite being among the largest meat producers in the world, is also the biggest importer of meat. In fact, while other countries curtailed imports, China increased its meat imports after African Swine Fever continued to impact local production. Additionally, higher feed costs resulted in profitability in the meat sector declining in 2021, all of which have contributed to an uncertain couple of years in the meat industry.
While the meat industry has undoubtedly suffered setbacks in recent years, the outlook still seems quite positive in the long term, and production is expected to continue to increase globally with herd expansion taking place in China and the Americas, and improved technology implementation resulting in higher meat production per animal. Further, increasing population in most of the world will see demand increase by 14% by 2030, according to the Organization of Economically Developed Countries, while increased income will also contribute to greater meat consumption. The one drawback in the first few years of the 2020s is the fact that pig meat production will still be limited due to the aforementioned African Swine Fever though production is expected to be back to normal by the end of 2023.
Even though the outlook is positive, there are definitely some changing trends with respect to meat demand across the world, with such changes generally being divided across geography and income levels. In the West, vegetarianism and veganism are growing in popularity, which has led to a decline in meat consumption. Most European countries are also facing declining birth rates and populations, which again adversely impact demand for meat. In a world which is becoming more and more climate conscious, especially after seeing its devastating impact in regions around the world, meat production has also been under the glare, with its production said to account for nearly a quarter of total greenhouse gas emissions, while also contributing to deforestation and forest fires. All of this has led to renewed pressure to develop methods for sustainable meat production in the future, and the cultivated meat industry is a direct result of this. Lab grown meat is now becoming a reality and major meat producers are investing in this area, with McKinsey stating the cultivated meat industry aims to be worth $25 billion by 2030, though it will still contribute less than 1% to the global meat industry. This, plus changing trends in consumption, has led to poultry, or white meat, dominating meat production across the world and according the OECD, poultry meat will account for over 40% of total meat consumption across in 2030, which might see a shift in focus of the biggest meat producing nations in the world, not to mention the biggest meat consuming countries in the world, where unsurprisingly, European countries barely have a mention.
In the U.S. itself, the meat industry is currently struggling somewhat, something that is impacting the biggest meat processing companies in the country. The impact has been seen across various meat segments including beef, chicken and pigs, which low margins and supply changes greatly impacting the profits of some of the biggest players in the industry. Inflation has also impacted demand for meat, and recent earnings of major meat companies have taken a major hit because of this. This was called out by JBS, in its Q2 2023 earnings call where it stated "In the United States, the challenge of beef business will persist for the coming months, consider a scenario of tight margin with a lower cattle supply. Our diversification strategy has been complemented by investments in value-add products and strong brands in the country we operate." Further challenges include supply of cattle, which the company also mentioned by stating "In the United States, the challenge of beef business will persist for the coming months, consider a scenario of tight margin with a lower cattle supply. Our diversification strategy has been complemented by investments in value-add products and strong brands in the country we operate." Because of this, JBS stock has declined by more than 15% YTD 2023.
Tyson Foods, Inc. (NYSE:TSN), another top meat producing company, also called out the difficult situation the industry is facing currently, stating in its Q2 2023 earnings outlook " Last quarter, we said that we expected Q2 to be tougher than Q1, and this quarter was definitely a tough one. As you will have seen in our release earlier this morning, results were weaker than expected, and top-line performance was mixed, particularly when compared to our strong performance last year. At the same time, we outperformed our large branded-food peers in volume and dollar sales and continue to gain pound and dollar share in our retail core business lines. As I also said last quarter, I can't remember a time when our business faced the highly unusual situation that we're currently seeing, where all three of our core protein categories, beef, pork, and chicken are experiencing market challenges at the same time. This unusual confluence of issues continued in Q2 and directly impacted our results. I know that you watch the protein markets closely, and like us, know that there are many factors at play here that are macro in nature. For example, beef is cycling out of historically strong margins that were seen throughout most of fiscal 2021 and '22. Cutout values across protein complex are much lower than a year ago. Inflation has also remained elevated and persistent, which has dramatically impacted our cost. The current macro backdrop is clearly tough." Tyson Foods, Inc. (NYSE:TSN) has seen its share price fall by more than 20% YTD, unsurprising considering its recent results. In May 2023, BMO Capital, an investment advisory firm, slashed its target price for Tyson Foods, Inc. (NYSE:TSN) from $66 to $48. The company was also mentioned by Aristotle Capital Management LLC, an asset management firm. Here is what the fund said:
“During the quarter, we exited our investments in Sun Communities, Elanco Animal Health and Tyson Foods, Inc. (NYSE:TSN) and established new positions in Merck and Sysco. We first invested in Tyson Foods during the second quarter of 2019. At the time, we were encouraged by what we had identified as the company’s demonstrated ability to “brand” what had been previously considered pure commodity products. Furthermore, we were attracted to Tyson’s Prepared Food business, consisting of a strong portfolio of brands with attractive margins and the opportunity to gain market share as consumer preferences shifted toward prepared foods. While we believe catalysts remain, we decided to sell, as we were concerned with management changes over the past year, starting with the CEO resigning in 2021 for personal reasons, followed by the resignation of the head of Prepared Foods and exacerbated by the company’s decision to name John R. Tyson, the 32-year-old son of the firm’s chairman, as CFO.”
Methodology
To determine the top meat producing countries in the world, we headed over to the Food and Agriculture Organization, and determined all meat production by country from 2019 to 2021, the last year on record. We have considered the total meat production by country over the last three years for our rankings. The top 20 meat producers account for over 75% of total global meat production over the last three years.
Total meat production from 2019 to 2021 (in tonnes): 10,622,856
Italy has taken a unique turn with respect to cultivated meat, banning its imports to protect its own industry, in a move which has met opposition due to its impact on climate change.
Total meat production from 2019 to 2021 (in tonnes): 12,188,473
Türkiye's meat production ramped up by over 12% in 2022, cementing its position among the leading meat producing countries globally.
Total meat production from 2019 to 2021 (in tonnes): 12,413,767
Like many advanced countries, Japan's meat industry could be at a crossroads right now, as it is committing to cultivated meat in a bid to ensure sustainability in food production.
Total meat production from 2019 to 2021 (in tonnes): 12,517,033
Despite uncertainty in recent times, the meat industry in the UK is expected to improve as demand rises and according to IBIS World, the UK meat industry was worth £9.5 billion in 2022.
Total meat production from 2019 to 2021 (in tonnes): 12,740,797
Vietnam has been inviting investment from EU firms, claiming ripe opportunities and strong investment returns in the future.
Total meat production from 2019 to 2021 (in tonnes): 13,984,077
While Australian meat production has declined year on year in the last three years, Australia is expected to ramp up meat production in 2024, which according to the U.S. Department of Agriculture, will be one of the highest production years in history for the country.
Total meat production from 2019 to 2021 (in tonnes): 14,225,693
Pakistan is aiming to enhance safety standards in meat production, as it is a major exporter to various countries. However, recently, the UAE temporarily banned frozen meat imports from Pakistan after the discovery of fungus in an assignment.
Total meat production from 2019 to 2021 (in tonnes): 14,231,068
The Indonesian government is aiming to reach a major deal with the Saudi Arabian government to export meat to the latter, keeping millions of annual hajj pilgrims in mind.
Total meat production from 2019 to 2021 (in tonnes): 15,393,130
Despite concerns regarding bird flu, poultry production is still continuing to rise in Poland though overall meat production declined by 3% between 2020 and 2021.
Total meat production from 2019 to 2021 (in tonnes): 15,543,324
The established of a major meat processing plant has been agreed between Hilton Foods and Walmart Canada to supply the latter.
Total meat production from 2019 to 2021 (in tonnes): 16,167,700
In France, the demand for cheap meat is continuing to grow which has led to the government opting to push additional farming and improve its position as it continues to be counted among the biggest meat producing countries in the world.
Total meat production from 2019 to 2021 (in tonnes): 18,528,745
While initially looking to ban meat exports, Argentinian officials walked backed the purported ban in September 2023, with the reversal coming after a significant currency devaluation.
Total meat production from 2019 to 2021 (in tonnes): 22,249,417
Spain is considered to be among the leading global pork producers, though it has received severe backlash for this move, with accusations that rural depopulation is increasing because of this.
Total meat production from 2019 to 2021 (in tonnes): 22,505,910
The decline in feed prices have bolstered beef and pork output in Mexico, which will enable it to cement its position among the biggest meat producers in the world.
Total meat production from 2019 to 2021 (in tonnes): 23,365,975
The largest meat producing country in Europe, meat consumption in Germany has fallen to its lowest levels in 34 years while production also declined by nearly 6% in the first half of 2023.
Click to continue reading and see the top 5 meat producing countries in the world.
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Disclosure: None. Top 20 meat producing countries in the world is originally published on Insider Monkey.
