Market Report Continued from page 11 Outlook Continued pressure on raw material supplies for the US rendering industry is likely to carry into 2014 and beyond. The USDA Economic Research Service predicts beef production to decrease by six percent this year, from 25.6 million pounds in 2013 to 24.1 million pounds in 2014, and continue its decline until 2017. Both pork and poultry production are forecasted to increase by three percent this year, although a wildcard is the effect of PEDV in the swine industry. It is estimated that four million pigs have died so far. For fats, demand and prices should rebound in 2014 as the glut of palm oil has been reduced and its largest producer, Indonesia, is also becoming the largest user due to the expansion in the country’s biodiesel mandate. International Market Conditions Protein Meals As the global economy worsened last year, the worldwide feed industry’s expansion slowed. According to the Global Feed Survey, worldwide feed production increased one percent to 963 million metric tons in 2013. China is the largest feed market in the world, although production decreased from 198 million metric tons in 2012 to 189 million metric tons last year. By regions, Asia is the largest feed producer in the world at 348 million metric tons in 2013, down from 357 million metric tons in 2012. Feed production in Europe rose from 208 million metric tons in 2012 to 227 million metric tons in 2013 and North American production was up slightly to 189 million metric tons. Latin American feed production rose four percent to 142 million metric tons while feed production in the Middle East/Africa region rose slightly, from 56 million metric tons to 57 million metric tons. These increases in feed production continue to create demand for rendered products. NRA targets both the poultry and aquaculture industries in its export promotion programs to expand overseas markets. Global aquaculture feed expanded from 29.7 million metric tons in 2011 to 34.4 million metric tons in 2012 and to 57 million metric tons in 2013. Although the global poultry feed market is the largest at 46 percent of total world feed production, aquaculture is the fastest developing market at just over 17 percent in 2013. While this industry is small, it is growing quickly and processed animal protein meals have a competitive advantage in aquaculture diets because of their similarities to fish meal and lack of anti-nutritional factors. Total exports of US processed animal protein meals grew by close to six percent in 2013 to 553,000 metric tons. Last year started out slow as harvests of competing oilseed meals were strong; however, droughts in various producing nations helped to strengthen prices later in the year. Indonesia continues to be the largest importer of US processed animal proteins, importing 231,000 metric tons in 2013, up over three percent from 2012. It also reportedly imported over 1,000 metric tons of feather meal last year, a 100 percent increase from the previous year. Mexico is the second largest US market, importing approximately 83,000 metric tons of US processed animal proteins in 2013, down 16 percent from 2012. China, the third largest US market, increased its imports by 53 percent to just over 50,000 metric tons. Looking at protein meal exports in table 4, the positive message is that markets are expanding and growth in some of the smaller to medium size markets is expanding greatly. This growth helps to spread the risk of exporting in case a major market closes for any given reason. NRA, in coordination with USDA’s Animal and Plant Health Inspection Service and Foreign Agricultural Service, has put much effort into opening markets for processed animal proteins in countries like Peru, Colombia, Chile, the Philippines, and Malaysia. All of these countries saw very strong growth in 2013. The demand for animal proteins as a replacement for fish meal has changed the price structure for these proteins. Continued on page 15 Chart 1. Average monthly prices of select oil, fat, and greases, 2010- 2013 (per metric ton) www.rendermagazine.com Render April 2014 13
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