Impact of global developments upon the European Animal By-Products Industry …A_Vernooij.pdf ·...
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Impact of global developments upon the European Animal By-Products Industry Albert Vernooij Rabobank International How to capitalize the opportunities?
Transcript of Impact of global developments upon the European Animal By-Products Industry …A_Vernooij.pdf ·...
Title Slide
Impact of global developments upon the European Animal By-Products Industry
Albert Vernooij
Rabobank International
How to capitalize the opportunities?
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2
Global Sector-Specialist Bankers
Grains & Oilseeds
Red meat
Poultry
Dairy
Sugar
Crop Inputs
Food processing
Beverages
Column containing text
F&A
supply
chains
Climate
changeSustainabillity
Feeding
9 billion
people
Rapidly
rising
welfare
F&A supply chains are under unprecedented pressure
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
No
rth
Am
eric
a
Mex
ico
So
uth
Am
eric
a
EU
27
Tu
rkey
Ru
ssia
Afr
ica
Ch
ina
Ind
ia
Ind
on
esia
Jap
an
Oce
ania
Siz
e o
f fo
od
ma
rke
t (b
lnU
SD
)
food market 2010 growth 2020
Source: Rabobank, Economist Intelligence Unit and FAO, 2010
Consumer spending on food will double in the next decade
Title with large table
Main driver: Rising welfareThe Global Middle Class is growing faster
than total population
About 3.0 billion people will ascend to the Middle Class until 2030
Global middle class (million heads)
0
500
1000
1500
2000
2500
3000
3500
2009 2020 2030
Spending Global middle class (mln USD 2005 PPP )
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
2009 2020 2030
Title with large table
China is leading this development
• Estimate 27 million Chinese people entering middle class each year
• Urbanization the driver 225 cities with 1 million population each by 2025 in China
• Rapidly growing middle class will drive the market and affect world supply and demand
Total Population Middle Class Percent
2000 1.3B 170M 15%
2010 1.4B 276M 23%
2015 1.4B 403M 31%
2020 1.4B 700M 48%
Title with large table
It will result in surging meat demand
Meat consumption China 2021
About 13 kg increase per head in the coming decade
And this for 1.3 billion people
0
20
40
60
80
100
120
140
2001 2011 2021 2001 2011 2021 2001 2011 2021
China Hong Kong United States
Beef and Veal Pork Broiler
Column containing text
Despite pressure on biofuels mandates across the globe
Biofuels are here to stay
Strongest supporters
The “F” factor effect: demand for agri-commodities will continue to rise
0
500
1 000
1 500
2 000
2000/01 2010/11 2020/21
Wheat Coarse grainsRice OilseedsSugar
Food FeedGlobal Commodity Demand (mln MT) Global Meat Demand (mln MT)
FuelEthanol (bln Litres) Biodiesel (mln MT)
-
50
100
150
200
250
300
350
400
2000 2010 2020
Beef Pork
Poultry Sheepmeat
0
20
40
60
80
100
120
140
EU North America
South America Asia
0
5
10
15
20
25
30
35
40
Can we produce this extra demand?
Land availability is limited
Forest area30%
Other land30%
Inland water4% Arable land
10%
Permanent crops
1%
Permanent pastures
25%
Agricultural area36%
2009
Source: UN, FAO, 2011
Forest area -3,1%
Other land 1,0%
Inland water 0,4%
Arable land 0,2%
Permanent crops 0,4%
Permanent pastures 1,1%
Development 1970 -2009 (%)
Mother Earth totals 13.4 billion hectares,
only about 4.6 billion hectares suitable for agriculture
Source: UN, FAO, 2011
Population vs. land availability per capita
Growth food consumption vs. yield vs. arable land (%)
Production not yet able to adjust to higher demand
0,0
0,4
0,8
1,2
1,6
2,0
0
2
4
6
8
10
Ha/capita
Popula
tion (billions)
Population Ha/Capita
0,9
1
1,1
1,2
1,3
1,4
1,5
1,6
Food Consumption Yield Arable Land
Column containing text
Commodity prices likely to remain high and volatile
0
100
200
300
400
500
600
700
Wheat (US) Corn (US) Soybeans (US)
oversupply tightertight
Global Commodity Prices (USD per tonne)
On average higher
and more volatile prices
Positive prospects for the Fat and Rendering Industries
Growth EU meat production lagging developments in China, Brazil and the US
-2 000
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
Ch
ina
Bra
zil
US
EU
Arg
enti
na
Ind
ia
Ru
ssia
Ph
ilip
ine
Th
aila
nd
Au
stra
lia
Ind
on
esi
a
Can
ada
Oth
er
Beef Pork Poultry
-5 000
0
5 000
10 000
15 000
20 000
25 000
Ch
ina
Bra
zil
US
EU
Arg
enti
na
Ind
ia
Ru
ssia
Ph
ilip
ine
Th
aila
nd
Au
stra
lia
Ind
on
esi
a
Can
ada
Oth
er
Beef Pork Poultry
2011 - 2021
Meat production growth by country and specie (1,000 ton)
2001 - 2011
Beef pastures under pressure globally
Global beef production 1960 – 2012 (1,000 ton)
0
10
20
30
40
50
60
70
196
0
196
2
196
4
196
6
196
8
1970
1972
1974
1976
1978
198
0
198
2
198
4
198
6
198
8
199
0
199
2
199
4
199
6
199
8
20
00
20
02
20
04
20
06
20
08
20
10
20
12
Chapter heading
Global beef production by country (1,000 ton)
Clear difference in developments in cattle production between the northern and southern hemisphere
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
1990 2000 2012
Safeguard prime beef supply key challenge European beef industry with new CAP and dairy quota abolition looming
EU cow herd (million head)
Dairy quota abolition will result in growth
dairy production in nortwestern Europe
12 000
12 250
12 500
12 750
22 000
23 000
24 000
25 000
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Dairy cows Beef cows (rsa)
0
10 000
20 000
30 000
40 000
50 000
60 000
1990 2000 2012
China dominating the developments on the global pork market, share EU declining
Global pork Production by country (1,000 ton cwe)
Source: USDA, 2012
80
90
100
110
Global pork production (mln ton)
Growing export dependency and cost price increasing regulation slows down recovery EU pork production
EU pork balance (million tonne cwe) EU sow herd and slaughter numbers (1,000 head)
F=forecast; Source: European Commission, Rabobank, 2012
18
19
20
21
22
23
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Export
Consumption
Production
0
2
4
6
8
10
12
14
16
18
225
230
235
240
245
250
255
260
Slaughterings Sow Herd dec (rsa)
Germany and Spain continue to dominate EU pork industry
0
10
20
30
40
50
60
70
DE ES FR PL DK NL IT BE UK Other
2007 2008 2009 2010 2011 2012
EU pork production by country (1,000 ton cwe)
Top 4 cementing their positions in global poultry market
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
2007 2008 2009 2010
Global poultry production total and by country (1,000 ton cwe)
50
60
70
80
90
20
00
20
02
20
04
20
06
20
08
20
10
20
12
In European poultry, Poland is rapidly gaining market share
-
500
1 000
1 500
2 000
2 500
3 000
FR UK PL DE ES IT NL Other
2007 2008 2009 2010 2011 2012
10 000
10 500
11 000
11 500
12 000
12 500
13 000
EU poultry production total and by country (1,000 ton cwe)
Sourcing costs to remain elevated
Source: European Commission, 2013
EU poultry price (EUR kg cwe)EU pork price (EUR kg cwe)EU beef price (EUR kg cwe)
2,50
3,00
3,50
4,00
4,50
1,20
1,40
1,60
1,80
2,00
1,40
1,60
1,80
2,00
2,20
Column containing text
• The “F” factor effect: demand for agri- commodities will continue to rise
• Commodity prices likely to remain high and volatile
• Strong growth meat production especially in China but also in Brazil and the US
• Limited growth EU meat production
• Sourcing costs to remain elevated
Sum up meat demand and production
What will be the impact on the European Fat and Rendering Industries
Column containing text
Cap of 5% on 1st generation biofuel will roughly double 2nd generation until 2020
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
2009 2010 2011 2012
Double countingrule
2nd generation
HVO
Net imports ofFAME
Domestic 1stgeneration FAME
0
0,1
0,2
0,3
0,4
2007 2008 2009 2010 2011 2012
EU Biodiesel consumption (Tonne)Tallow/grease in biodiesel production EU(Million tonne)
Global MBM demand will continue to offer opportunities
-
200
400
600
800
1 000
2007 2008 2009 2010 2011 2012
Export MBM by country (1,000 MT)
-
100
200
300
400
500
600
700
2007 2008 2009 2010 2011 2012
Import MBM by country (1,000 MT)
Fast modernisation Chinese pig industry will increase availability raw material
69%
5%
21%
25%
10%
70%
0%
20%
40%
60%
80%
100%
120%
2010 2020F
Slaughtering by hand Half mechanized
Mechanized
21 000
3 000
0
5 000
10 000
15 000
20 000
25 000
2010 2020F
Changes in the no. of designated slaughtering housesMechanization Chinese pig slaughterhouses
Column containing text
EU slaughter industry will consolidate
Forward integration slaughter industry into by-products
Further processors increasingly secure raw material supply
Dedicated animal by-product processers strengthen position
Shift in carcass valuation heightens fight for raw material
0%10%20%30%40%50%60%70%80%90%
100%
Top 1 Top 2 Top 3 Other
Share top 3 pig slaughterhouses NW Europe
Column containing text
Strong growth opportunities for tallow/grease in EU biodiesel production
MBM export to remain elevated
Raw material availability will increase But not in the EU
Competition for raw material heightens
Opportunities for the European Fat and rendering Processing Industry
How to capitalize the opportunities?
Strategic options
Consolidation Diversification
Internationalisation
Autonomous growth
European Fat and Rendering
Processing Industry
Chapter heading
Thank you for your attention
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