By Robert Gultig
While recent developments such as the drastic increase in freight rates (while currently falling), energy and fertiliser costs have had a major impact on meat availability and pricing, in this article we are going to look at the top 5 reasons why meat prices will continue to rise further for years to come.
1. Animal Disease
Bird flu has been raging across the Northern Hemisphere this year, wiping out millions of birds, banning multiple states and countries. 16 EU countries have reported bird flu findings in 2022 with the UK and USA reporting new incidents almost daily. More than 47 million birds have been culled in the US alone and another 48 million in Europe collectively. The UK has reported the worst outbreak in history and over 3 million birds have been culled this year. It has even impacted penguin colonies in South Africa.
Some countries, like China, have vaccinated against the virus for years, but the vaccine is banned in the UK and Europe. There are two distinct types of bird flu infections:
- Low pathogenicity avian influenza (LPAI) that typically causes little or no clinical signs;
- high pathogenicity avian influenza (HPAI) that can cause severe clinical signs and possible high mortality rates.
With an unprecedented surge of bird flu in recent months, these poultry industries affected will probably be hit again with the next wave, before it recovers from the current one.
African Swine Flu continues to spread through Asia and Europe. However, it has slowed down recently. Unfortunately, it will continue to impact production, supply and the cost of pork. For example, Thailand’s pork supply is expected to drop by as much as 35% this year, with prices surging more than 60%, contributing to the 40% surge in poultry prices due to consumer switching.
It is estimated that over 76% of all freshwater fish worldwide has been depleted in the past 50 years and a third of freshwater fish is on the verge of extinction.
According to a report by Reuters, the average annual catch of seawater fish has been declining by 3.5% since 2012. At this rate, the world’s oceans could be virtually emptied of fish by 2048. Nearly 80% of the world’s fish population are already in a state of collapse. Worldwide, 90% of large predatory fish, such as sharks, tuna, marlin, and swordfish, are massively depleted.
There is also 9bn tons of plastic in the ocean since 1950 and at the rate of plastic production and dumping, there may be more plastic in the ocean than fish in the next 20 years.
Another claim is the climate change has also irreversibly reduced fish numbers by 4.5% in the past decade.
Companies and countries have moved towards aquaculture as the solution. Aquaculture already supplies over 50% of all seafood consumed worldwide. Investment in alternative seafood (cultured meat) increased 92% from 2020 to 2022, according to a Good Food Institute report. These two trends is expected to continue to rapidly grow to meet the growing population and consumer protein needs.
3. Soil erosion
It goes without saying that healthy soil is a vital part of human needs, directly affecting food availability, animal feed, fibre, clean water, clean air and good bacteria. The functioning of our ecosystem, food supply and gut health is directly linked soil quality. 95% of the food we eat comes from the soil in some shape or form.
According to the United Nations, majority of the world’s soil resources are in poor or very poor condition. Overgrazing and excess tillage has already led to 33% of the Earth’s soil being degraded and over 90% could become degraded by 2050. Rainforests now only cover 7% of the earth’s surface, while housing half of all animal and plant species, which are key in revitalising soil and the conversion of carbon dioxide to oxygen.
A recent study found that soil erosion costs the world economy about US$8,000,000,000 a year, contributing to 3.5% in the world’s average food price increase each year.
Water levels in Chinese & European rivers have dropped to record lows in 2022 caused by climate change, leading to less rain, but also by man made structures up stream. It is estimated that climate change increased the potential for one of the worst droughts in European modern history, by up to 2000%.
While dry seasons are a recurrent issue in East Africa, the situation has worsened dramatically with over 50 million “food insecure” people living in Somalia, Kenya, Uganda, Djibouti, Ethiopia, South Sudan and Sudan. Combined with other global factors, The IMF’s twice-yearly Regional Economic Outlook Report warned that 123 million people (12% of sub-Saharan Africa’s population) face acute food insecurity over the next year.
A “megadrought” in North America and parts of South America is reducing and slowing down the harvest, reducing the effectiveness of the fertiliser for crops and forcing farmers to send cattle to slaughter early, which will take years to replenish. 75% of the US farmlands are currently facing drought conditions. The same can be said for Argentina, driven by the La Niña phenomenon, affecting 126 million hectares, equivalent to 75% of the agricultural area.
5. World Population Growth
By the year 2050, the world population will be close to 10 billion people. The global food production will need to double to meet humanity’s projected protein needs. Given the current state of the soil situation, overfishing and greenhouse gas emissions from cattle farming, the meat industry will need to adjust its methods to satisfy consumer demands, while managing a sustainable supply of animal protein.
By Robert Gultig – Professional Protein Trader
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