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Emerging Challenges and Opportunities for the Global Livestock Sector. Centro de Consignatarios de Productos del País Buenos Aires, Argentina August 22, 2013. Major Livestock Industry Trends. High costs of production High grain and energy prices
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Emerging Challenges and Opportunities for the Global Livestock Sector Centro de Consignatarios de Productos del País Buenos Aires, Argentina August 22, 2013
Major Livestock Industry Trends • High costs of production • High grain and energy prices • Effects of drought and other production challenges • Changing patterns of economic growth • Changing consumer demographics • Aging population in developed (and some developing) countries • Evolving food culture • Increasing regulation • Increase in food-issue activism
MYA Corn Price Data Source: USDA National Agricultural Statistics Service.
Persistent Drought July 26, 2011 July 24, 2012 July 23, 2013
Meat Exports 2012 Cantidad de Exportacion: Pollo: 3.3 bil. kg Cerdo: 2.4 bil. kg Res: 1.1 bil. kg Data Source: USDA Foreign Agricultural Service.
Disposable Income Growth % de cambio A/A Real PDI annual growth rate <=1% for 4 years.
Economic Growth Origen: FondoMonetarioInternacional
Freedom to Operate • Regulatory freedom • International pressure to “do something” about climate change • Social license to operate • Animal rights/welfare, food safety, environmental stewardship
Social License 4 Factors Affecting SLO Level • Institutionalized Trust • Inter-actional Trust • Socio-Political Legitimacy • Economic Legitimacy Levels of Social License to Operate (Adapted from Boutilierand Thomson, 2011) Identificacionpsicologica aprobacion aceptacion retenido/ retraerse
Implications for Livestock Industries • Continuing advantage for more efficient production • Continued preference for lower-valued products in slow-growing developed world (especially US, Europe, Japan) • Increasing reliance on exports for demand growth for all major meat producers • Pressure on costs from increased regulation and consumer demands for information and/or production system changes
Meat Industry Changes • Beef production growing slowly • World shares of exports changing • Pork production/consumption growing moderately • Strong export growth, mostly from Asia • Poultry production/consumption growing strongly