China is the big gainer â it's fourfold increase in production (from 93. 000 tons in 1961 to ... the right-hand axis.
Merino Science
The global sheep industry *Prof. Nick Vink
It is useful sometimes to stand back and take a global and long-term view of an industry in order to better understand what it’s future prospects are. In the following paragraphs world production and consumption of wool and sheep meat, as well as world trade in sheep meat, live animals and wool is analysed for the period 1961 to 2007. In all cases the data come from the Food and 23200 Agriculture17Spain Organization of the United 17Bulgaria 30000 18Romania 23000 18Indonesia 24400 Nations and can be found on their website (www.http://faostat.fao.org/default.aspx).
Table 1: Wool production in 1961 and 2007: country rankings 2007
Rank
Area
1 2
Australia USSR
Production (MT) 737100 366300
3
New Zealand
266300
3
4
Argentina
182000
4
5
USA
144156
5
6
South Africa
142600
6
7
China
93000
7
8
Uruguay United Kingdom Turkey India Iran Spain Brazil France Afghanistan Bulgaria Romania Chile Pakistan
85000
10 11 12 13 14 15 16 17 18 19 20
Production (MT) 464736 395000
Rank
Area
1 2
8
Australia China New Zealand Iran United Kingdom Argentina Russian Federation Sudan
59602
8
Turkey
46000
46280 32600 29091 29002 24570 23600 23400 23200 23000 22000 15200
10 11 12 13 14 15 16 17 18 19 20
India Uruguay South Africa Pakistan Morocco Kazakhstan Syria Spain Indonesia Algeria Uzbekistan
45900 45570 45000 40600 40000 34200 34000 30000 24400 23360 22386
217900 75000 62000 60000 50620 46000
Figure 1 shows production of wool for the world as a whole, and for the major regions of the world, where the latter is measured on the right-hand axis. The data show that world production increased steadily for three decades after 1961, from 2 1/2 million tons to its peak in the early 1990s, when it reaching almost 3 1/2 million tons.
28
M E R I N O
19Algeria
23360
15200
20Uzbekistan
22386
F O C U S
2 0 0 9
World
South America
Asia
07
05
20
03
01
20
20
99
20
97
19
95
93
19
91
19
19
89
19
87
85
Europe
19
83
19
19
81
19
19
19
19
19
19
19
19
19
19
19
Africa
79
0
77
0
75
1000000
73
375000
71
2000000
69
750000
67
3000000
65
1125000
63
4000000
61
1500000
19
Table 1 shows the ranking of the 20 biggest wool-producing countries in the world in 1961 and again in 2007. Australia and New Zealand remain the largest and third largest producers respectively, while the break-up of the Soviet Union leaves the constituent parts (Russian Federation, Kazakhstan and Uzbekistan) the fourth largest producer. China is the big gainer – it’s fourfold increase in production (from 93 000 tons in 1961 to 395 000 tons in 2007) has propelled it to second place, not far behind Australia, which has seen a large decline in production over this period. New Zealand’s output has remained relatively stable, while South Africa’s has declined from 142 600 tons in 1061 to a mere 45 000 tons in 2007, falling from 6th place overall to 12th place. Of interest, too, is the increase in production of wool recorded by Iran, Pakistan and India, and the near-total collapse of production in the USA, which has dropped off the list after being the fifth largest producer in 1961.
9
22000
20Pakistan
Figure 1 shows production of wool for the world as a whole, and for the major regions of the world, where the latter is measured on the right-hand axis. The data show that world production increased steadily for three decades after 1961, from 2 ½ million tons to its peak in the early 1990s, when it reaching almost 3 ½ million tons.
Wool production
1961
19Chile
Oceania
Figure 1: Global production of wool, 1961-2007
Figure 1: Global production of wool, 1961-2007
As can be expected, trends in the global wool industry are to a large extent a reflection of what happens in Australia and New Zealand, where the production of wool also peaked in the early As can be expected, trends in the global wool industry are to a large 1990s, having increased from a combined 1 million tons (on the left hand scale) to 1.4 million extent a reflection of what happens in Australia and New Zealand, tons in 1991, then declining to below 700 000 tons in 2007. Production in Africa has remained fairly constant at around 200 000 tons over thepeaked whole period, while in South America it declined where the production of wool also in the early 1990s, having steadily from from just overa300 000 tons to 1 under 200 000tons tons. Production Europe increased increased combined million (on the in left hand scale)slowly from around 600 000 tons to 800 000 tons in the early 1990s, and then fell sharply to just above to in 1991, below 700level. 000 tons in 2001.4 000 million tons withintons the decade – sincethen then itdeclining has remainedto constant at that 2007. Production in Africa has remained fairly constant at around 200 The exception (as the with whole so manyperiod, other commodities is Asia, where production has 000 tons over while in globally) South America it declined increased from just over 200 000 tons in 1961 to almost 800 000 tons in 2007, with a great spurt steadily from just over 300 000 tons to under 200 000 tons. Production in growth in the early 1990s. in Europe increased slowly from around 600 000 tons to 800 000 tons Production of mutton lambthen fell sharply to just above 200 000 tons in the early 1990s,andand Table 2 shows the country rankings for the production of mutton and lamb in 1961 and 2007. The within the decade – since then it has remained constant at that level. USSR was the biggest producer in 1961, but as in the case of wool, the constituent parts of the former Soviet Empire have lost five places: the combined production of the Russian Federation,
Kazakhstan and Turkmenistan puts them in fifth place, behindglobally) Iran in fourth place. China has The exception (as with so many other commodities is Asia, where shown the largest increase, from some 56 000 tons in 1961 (in 17th place) to more than 2 million production has increased from just over 200 000 tons in 1961 to almost 800 tons and first place in 2007, while Iran has tripled output over this period and India has doubled 000 tons in 2007, with a great spurt in growth in the early 1990s.
Production of mutton and lamb Table 2 shows the country rankings for the production of mutton and lamb in 1961 and 2007. The USSR was the biggest producer in 1961, but as in the case of wool, the constituent parts of the former Soviet Empire have lost five places: the combined production of the Russian Federation, Kazakhstan and Turkmenistan puts them in fifth place, behind Iran in fourth place. China has shown the largest increase, from some 56 000 tons in 1961 (in 17th place) to more than 2 million tons and first place in 2007, while Iran has tripled output over this period and India has doubled output, with the result that they are now the fourth and sixth largest producers respectively. Production has increased in Australia and New Zealand, which maintain their rankings as the second and third largest producers respectively. South Africa’s production has increased by far less, and the country has slipped from 12th to 16th on the list. Nigeria has replaced Ethiopia as the only other African country on the list, while the USA has dropped from fourth to 19th place, and France from 10th to 17th place.
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Merino Science International trade in wool
Table 2: Mutton and lamb production in 1961 and 2007: country rankings 1961 Rank
Area
1
USSR
3
New Zealand
2
Area
1
China
458105
3
377840
4
New Zealand
268176
5
Turkey
247573
6
India
122672
8
927748 586255
USA
United Kingdom
5 6 7
Argentina
8 9
167154
Iran
10
Spain
101500
12
13
Ethiopia
80800
13
15
Afghanistan
61137
15
16
79124
Uruguay
17
China
18
Yugoslav SFR
19 20
Romania
Syria
233718
234000 180263 178075 151500
Russian Federation
146869
Nigeria
141915
Kazakhstan
115772
Morocco
108685
France
18
International trade in mutton and lamb
120416
South Africa
17
52423
234490
Pakistan
16
55978
Pakistan
India
Algeria
14
56220
336000
Sudan
11
South Africa Mongolia
394203
Spain
12 14
543327
United Kingdom
10
104491
702698
Iran
9
114000
2003608
Australia
7
116267
France
11
2
Figure 3 shows the net exports (exports minus imports) of wool for the major regions of the world since 1961. The major importers of wool are Asia and Europe, with Australia and New Zealand the major exporters. However, consumption of wool in Europe is declining – imports have declined from some 800 000 tons in 1961 to almost zero in 2007 (Europe exported 125 000 tons of wool in 2007, and imported less than 200 000 tons) at the same time that total production has declined. The situation in Asia is different – countries on the continent exported only 45 000 tons in 2007, and imported some 340 000 tons in the same year, giving net exports of around 300 000 tons. These net imports have remained in a band between 200 000 and 300 000 tons per year since 1961. However, as production has been increasing over this period, the region is clearly becoming more self-sufficient. This is reflected in the declining net exports of the Oceanic countries, from more than 800 000 tons per annum in the late 1960s to around 400 000 tons per year in the past decade. Africa and South America have changed from being net exporters to relative self-sufficiency, while North America has gone from being a small net importer to being self-sufficient.
Production (MT)
Rank
Australia
4
2007
Production (MT)
106800
Turkmenistan
90194
52300
19
USA
87200
50996
20
Greece
86000
Figure 2 shows that world production of mutton and lamb has increased steadily, from some 5 million tons (right hand scale) in 1961 to over 8 million tons in 2007. This is mainly the result of increased production in Asia (from less than 1 million tons in 1961 – right hand scale – to more than 4 million tons or from 20% to 50% of global production) and Africa, where production increased from under 500 000 tons in 1961 to 1.3 million tons in 2007. As will be seen later, this increase in production occurred despite a sharp decline in production in South Africa. Production in Australia and New Zealand remained relatively constant, while production in Europe declined sharply after 1990, mirroring the decline in wool production.
Figure 4 shows the net exports of mutton and lamb. The Asian region was importing more than 300 000 tons per annum until the early 1980s, but currently imports around 200 000 tons per year as a result of the sharp increase in production from China. Europe’s imports have also declined, from some 400 000 tons per year in the early 1970s to around 200 000 tons per year over the last decade. Australia and New Zealand are the only substantial exporters, with the Oceania region responsible for 400 000 tons per year in the 1960s, increasing to around 700 000 tons per annum over the past five years. The remaining regions are relatively self-sufficient, although North America has become increasingly import-dependent over the past decade. 1000000
1000000
750000
750000
500000
500000
250000
250000
0 0
5000000
‐250000 ‐250000
‐500000 ‐500000
‐750000 ‐750000
‐1000000
Africa Africa
North America
South America
Asia
Europe
2005 2006 2007
‐1000000 1961 1961 1962 1962 1963 1963 1964 1964 1965 1965 1966 1967 1966 1968 1967 1969 1968 1970 1969 1971 1970 1972 1971 1973 1972 1974 1973 1975 1974 1976 1975 1977 1976 1978 1977 1979 1978 1980 1979 1981 1980 1982 1981 1983 1982 1984 1983 1985 1984 1986 1985 1987 1988 1986 1989 1987 1990 1988 1991 1989 1992 1990 1993 1991 1994 1992 1995 1993 1996 1994 1997 1995 1998 1996 1999 1997 2000 1998 2001 1999 2002 2000 2003 2001 2004 2002 2005 2003 2006 2004 2007
To put this performance in perspective, it is instructive to look at global production of beef, which was 28 million tons in 1961, doubled to 54 million tons in 1991, but then kept on increasing, to reach 60 million tons in 2007, i.e. double its level in 1961. Global poultry meat production increased even more spectacularly, from a base of 7.5 million tons in 1961 to 37 million tons in 1991 and 76 million tons in 2007 – a tenfold increase over these 46 years.
Oceania
North America
South Asia Oceania Figure 3:America Net exports of wool,Europe 1961-2007 Figure 3: Net exports of wool, 1961-2007
Figure 3: Net exports of wool, 1961-2007
9000000
800000 800000
600000
3750000
6750000
600000
400000
400000 2500000
4500000
1250000
2250000
0
0
200000
200000
00
-200000 -200000
Europe
07
05
03
20
01
20
20
99
20
97
19
95
93
19
91
19
19
89
19
87
19
85
83
19
81
19
19
79
19
77
19
75
73
19
19
71
Asia
19
69
19
67
19
65
63
19
19
Africa
-600000 -600000
Oceania
11996 611 11996 63 19 3 19 65 6 1 5 19967 6 19 7 19 69 1969 19 71 1971 19 73 1973 19 75 1975 19 77 1977 7 19 9 1979 8 19 1 198 81 119 3 9883 119 5 9885 7 119 9887 9 119 989 91 1199 9913 1199 9935 1199 9957 11999 979 12900 991 2 2000 013 22000 05 20 3 20 07 05 20 07
World
19
19
61
-400000 -400000
Africa Africa
Figure 2: Global production of mutton and lamb, 1961-2007
Figure 2: Global production of mutton and lamb, 1961-2007
International trade in wool Figure 3 shows the net exports (exports minus imports) of wool for the major regions of the world M E R I N O F O C U S 2 0 0 9 30 since 1961. The major importers of wool are Asia and Europe, with Australia and New Zealand the major exporters. However, consumption of wool in Europe is declining – imports have
North NorthAmerica America
South America South America
AsiaAsia
Europe Europe Oceania Oceania
Figure 4: Net exports of mutton and lamb, 1961-2007 Figure 4:4:Net exports of of mutton andand lamb, 1961-2007 Figure Net exports mutton lamb, 1961-2007 Productivity Productivity Figure 5 shows a proxy measure for the productivity of sheep farmers in the major regions of the Figure 5 shows a proxy measure for the productivity of sheep farmers in the major regions of the world. The data show that the global average proportion of the flock that is slaughtered every year
world. The data show that the global average proportion of the flock that is slaughtered every year
Merino Science Productivity
Prices
Figure 5 shows a proxy measure for the productivity of sheep farmers Table 3 shows at least part of the reason for the low per capita in the major regions of the world. The data show that the global consumption of sheep meat in most parts of the world, and the average proportion of the flock that is slaughtered every year has declining consumption in those parts of the world where it was increased from just above 30% annually in the 1960s to just less than traditionally favoured. The Table shows what types of meat were the 50% today – of the approximately 1.1 billion sheep in the world, some most expensive and which the cheapest, when comparing between 531 million were slaughtered in 2007! Most of this increase is however sheep meat, beef and chicken meat. Average prices for the three years due to the increased productivity in Asia and to a lesser extent in between 2005 and 2007 were used as the benchmark. Europe – in the rest of the world productivity seems to have remained The only country where mutton and lamb was the cheapest source relatively constant or even declined, as has been the case in South this increase is however due to the increased productivity in Asia and to a lesser extent in Europe Africa. of animal protein was Nigeria, hardly known as a large consumer of – in the rest of the world productivity seems to have remained relatively constant or even declined, as has been the case in South Africa. sheep meat. Beef was the cheapest meat in Argentina (for obvious 70.00 reasons); in Kenya (where chicken meat was, unusually, the most expensive meat); and in Turkey – in all other countries chicken meat was the cheapest. In most countries, mutton and lamb was the most 52.50 expensive source of meat. In Australia and New Zealand, where mutton and lamb is relatively abundant, it is cheaper than beef but 35.00 still more expensive than chicken. Even in China, which has posted the largest increases in the production of sheep meat, it is still more expensive than beef, as is the case in countries traditionally associated 17.50 with sheep meat consumption, such as France, Greece, Spain and Turkey.
World Asia
07
05
20
03
20
01
20
99
97
20
95
19
19
93
19
91
19
89
87
19
85
19
19
83
19
81
Africa Europe
19
79
77
19
75
19
19
73
19
71
19
69
67
19
65
South Africa South America
19
19
63
19
19
19
61
0
North America Oceania
Figure 5: The proportion of the regional sheep flock slaughtered annually
Figure 5: The proportion of the regional sheep flock slaughtered annually
Table 3: The relative prices of meat (average of 2005/07) Argentina Australia Belgium
Consumption Brazil Per capita consumption of sheep and goat meat is around one to three kilograms per person per Consumption year in most regions of the world, with Australia and New Zealand the two exceptions (Figure 6).Canada Their annual per capita consumption has, however, declined considerably, from more than 35 kgChile 1961 to less than 15 kg in 2003, the last year which meat comparable data are available. Perin capita consumption of sheep andingoat is around one to In South Africa, annual per capita consumption has declined from a high of almost 10 kg in the 1960s toChina three kilograms per person per year in most regions of the world, less than 5 kg in 2003. The South African Abstract of Agricultural Statistics gives currentCôte d’Ivoire with Australia Newconsumption Zealand the two exceptions 6). pork Their (2007/08) annualand per capita of poultry meat as 30 kg,(Figure beef 18 kg, 4.4 kg and France muttonper and lamb 3.4 kg. annual capita consumption has, however, declined considerably,
from more than 35 kg in 1961 to less than 15 kg in 2003, the last year in which comparable data are available. In South Africa, annual per capita consumption has declined from a high of almost 10 kg in the 1960s to less than 5 kg in 2003. The South African Abstract of Agricultural Statistics gives current (2007/08) annual per capita consumption of poultry meat as 30 kg, beef 18 kg, pork 4.4 kg and mutton and lamb 3.4 kg.
Germany Greece
Hungary Japan
Kenya
Mexico
New Zealand Nigeria Poland Russia
South Africa 6 Spain
Sweden Turkey UK
USA
Most expensive
Cheapest
Beef
Chicken
Sheep Sheep Sheep Beef Beef
Sheep Sheep Sheep Sheep Sheep Sheep Beef
Chicken Sheep Beef Beef
Sheep Beef
Sheep Sheep Sheep Sheep Beef Beef
Beef
Chicken Chicken Chicken Chicken Chicken Chicken Chicken Chicken Chicken Chicken Chicken Beef
Chicken Chicken Sheep
Chicken Chicken Chicken Chicken Chicken Beef
Chicken Chicken
Conclusion
Figure 6: Per capita consumption of sheep and goat meat (kg/person/year) Prices Figure 6: Per capita consumption of sheep and goat meat (kg/person/year) Table 3 shows at least part of the reason for the low per capita consumption of sheep meat in most parts of the world, and the declining consumption in those parts of the world where it was traditionally favoured. The Table shows what types of meat were the most expensive and which the cheapest, when comparing between sheep meat, beef and chicken meat. Average prices for the three years between 2005 and 2007 were used as the benchmark. The only country where mutton and lamb was the cheapest source of animal protein was Nigeria, hardly known as a large consumer of sheep meat. Beef was the cheapest meat in Argentina (for obvious reasons); in Kenya (where chicken meat was, unusually, the most expensive meat); and in
Since the early 1990s there has been a marked decline in global production of wool in all regions of the world excepting Asia (especially China), but the production of mutton and lamb has increased, again largely because of rapid increases in production in China. While international trade in sheep meat and in wool is still dominated by Australia and New Zealand, China is playing
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an increasingly important role in this arena as well. Price seems to be the driving force behind the relative stagnation in sheep meat consumption in most parts of the world. As is the case with so many other commodities, increases in production and consumption are dominated by the emergence of hundreds of millions of new consumers in China. South Africa seems to have been left behind. We have slipped down the global rankings in the production of both meat and wool, we have never been a large player in international markets for either commodity, our per capita consumption is declining, and our productivity seems to be well below global averages and is declining, unlike global productivity, which is increasing. Where does this leave the industry? This analysis is clearly at too aggregate a level to serve as a base for more detailed strategies. However, the industry cannot escape the fact that it has a poor image in the minds of consumers, largely because of health-related issues, and that the demand for wool has experienced
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a long-term decline. The industry needs to decide whether it sees its future as a niche, high value product (both in food and fibre) or whether it wants to compete head-on with more favoured meat types. * Prof Nick Vink (Vink, N, Prof
[email protected]; 0218082374) joined the University of Stellenbosch as professor in Agricultural Economics in 1996 after 11 years at the Development Bank of Southern Africa. He is an agricultural economist specialising in agricultural and rural development policy, land reform and empowerment, agricultural marketing, tax and international trade issues. Nick has been involved in a range of official government commissions and committees of investigation, inter alia in the deregulation of agricultural marketing and the provision of rural financial services. He has consulted widely to national departments (Water Affairs and Forestry, Agriculture, Land Affairs, Labour, Trade and Industry and the Treasury) as well as provincial departments. He has also consulted internationally, among others for the World Bank, IFPRI, FAO, USAID, DFID, etc. He serves on the Board of the Centre for Rural Legal Studies. He has published widely, both nationally and internationally, with more than 110 academic publications to his credit.
