IBISWorld Market Research
Increases in poultry consumption have constrained industry revenue.
Melbourne, Australia (PRWEB) May 30, 2014
The Meat Processing industry faced challenging conditions early in the five years through 2013-14 due to poor agricultural conditions and the global economic downturn. Since 2011-12, however, the industry had recovered as weather conditions improved. This has reduced input costs such as animal feed. Production volumes for beef have risen over the past five years to meet increased global demand, as have export levels. Over 2013-14, industry revenue is forecast to grow by 2.1% to $12.9 billion, assisted by the continual rise of export demand due to a depreciating Australian dollar. Total revenue for meat processors is expected to grow at an annualised 1.4% over the five years through 2013-14.
Australia's meat processors export close to 70.0% of production to international markets, competing with the United States, Brazil, New Zealand, Canada and Argentina for consumer demand. Over the past five years, competition in some of the largest export markets, including Japan and South Korea, has increased. New export markets, such as the Middle East and China, have been successful, as world demand for meat grows. Stagnation in domestic red meat consumption has adversely affected the industry's potential. IBISWorld industry analyst Ryan Lin states “poultry, the industry's largest competitor, has gained considerable market share over the past decade due to its image as a healthier, leaner protein source.” A return to more favourable weather conditions has eased some pressure in supply for the industry as cattle slaughter rates rise. Over the five years through 2018-19, meat production is anticipated to trend upwards as farmers establish themselves in the market following favourable weather conditions. According to Lin, “only modest growth in the volume of red meat consumption is expected, with organic and high-value meat to benefit most.” Beef production is forecast to increase, while lamb is expected to increase in value but decline in production.
The Meat Processing industry exhibits low levels of market share concentration. Over the five years through 2013-14, concentration in the industry is expected to rise through closures and acquisitions. Industry major player JBS Australia has increased its market share through a number of strategic acquisitions. Larger processing companies have also been vertically integrating into beef production, feedlots and wholesaling. In September 2011, American agricultural giant Cargill entered into a partnership with Teys Bros Australia to establish Teys Australia – A Cargill Joint Venture. For more information, visit IBISWorld’s Meat Processing report in Australia industry page.
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IBISWorld industry Report Key Topics
The Meat Processing industry consists of businesses that are mainly engaged in slaughtering livestock (except poultry); boning, freezing, preserving or packing red meat; canning meat (except poultry, bacon, ham or corned meat); manufacturing meals from abattoir by-products (except from products of poultry slaughtering); or rendering lard or tallow. The industry excludes beef feedlot operations.
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