After a year of economic recovery for some, the 2022 global meat market is being characterised by a weakening in demand linked to the worldwide economic downturn fuelled by the impact of the war in Ukraine.

These were the main points highlighted in the mid-year global meat market outlook report for members of the Gira Meat Club – a strategic consultancy and market research firm founded more than 50 years ago.

It claims the direct meat market impact of Russia’s war with Ukraine is not a huge one as both countries are relatively small producers, consumers, and traders of meat in a global context.

However, the indirect impact of the war on global meat markets is mostly negative through production cost inflation on oil, gas, electricity, fertiliser, grains and oilseeds, and a decline in global consumer disposable income which has put pressure on meat consumption.

Prior to the war in Ukraine, the meat industry was already facing additional inflationary pressures because of labour shortages and increasing costs of labour, higher logistical costs due to availability and cost of freight containers and ongoing disruptions linked to the global Covid-19 pandemic.

Animal disease issues also continue to impact global meat markets and are causing market access issues for certain countries.

The report highlighted that African Swine Fever (ASF) has moved further west across parts of the European Union and the highly Pathogenic Avian Influenza was prevalent across the EU and UK through the final quarter of 2021 and first half of 2022.

At the peak of the ASF impact on domestic pig production in China, the country was importing huge volumes of all meats from international suppliers around the world peaking at a monthly import of 465,000 tonnes of pork (product weight) in March 2021.

Monthly pork imports to China have tailed off significantly through 2022 to a low of 121,000 tonnes in April 2022.

The expectation is that more pork will be imported by China in the second half of 2022 to try and curb rising food inflation in the country.

China nevertheless remains an important driver of global meat markets and coronavirus lockdowns have hit the Chinese economy hard in the first half of 2022, with a strict lockdown in Shanghai hampering international trade.

On July 1, 2022, lockdowns or partial lockdowns were still in effect in 26 cities, affecting 140m people.

Covid quarantines and lockdowns discourage consumption particularly in the high-end food service sector in China where much of the beef and lamb is eaten. Until May 2022, beef imports remained closed.

However, the internal China price for imported frozen beef abruptly weakened in June, falling 20%. Falling demand due to Covid lockdowns and resulting economic weakness has led to

a build-up of frozen beef inventory.

Reduced import orders for Quarter 3 of 2022 will be the result.

Whilst there are some real warning signals to global beef exporters as China import demand weakens it is not all bad news in the international marketplace.

The world’s biggest consumer market for beef, the USA, which accounts for more than 21% of the beef consumed annually in the world, kicked off 2022 with a strong growth in beef imports which were up over a third by the end of April 2022. However, like the rest of the world, consumer inflation is rising in USA and has reached a 40 year high with gasoline prices in particular having risen sharply.

Consumer confidence has declined in the USA on the back of these rises and more general concerns about economic prospects, however beef demand remains strong and Gira is forecasting a record level of beef imports for 2022.

Gira believes the biggest challenge facing the beef and lamb industry is passing on rising costs to pressured consumers without seriously impacting consumption levels. The best opportunity it claims, comes from ensuring the widest possible market access to sell every component of the beef or lamb carcase to the best paying markets around the world.