In BMI's Venezuela Agribusiness Report for Q3 2009 we introduce the new Livestock Outlook. As with most industrial sectors in Venezuela, livestock production has been profoundly affected by President Hugo Chavez' Bolivarian Revolution. Strong growth in meat production in the early years of the decade was brought to a swift halt by the sharp recession in 2002 and 2003. Hopes of a quick recovery for the sector were dashed by the imposition of government price controls on food staples, including meat, in an effort to improve the living standards of the country's poor. The price controls and a return to strong economic growth saw demand for meat quickly recover to prerecession levels. Meat production, however, has lagged far behind. Producers forced to sell at the government-mandated level have struggled to turn a profit. This has been a major disincentive to investment in the livestock sector. Investment has been further discouraged by the threat of seizure and nationalisation by the government. Livestock farmers' difficulties were compounded by the rapid rise in feed costs through 2007 and 2008. In 2007 alone, beef production fell by 23.3% year-on-year (y-o-y) as established farmers left the business and new government-backed collectives struggled to get started. While production has been falling, demand for beef rose ever higher as oil-fuelled growth saw incomes rise. This has made Venezuela ever more reliant on beef imports, whcih rose from 2,000 tonnes in 2000 to 320,000 tonnes in 2008.
While the recession in Venezuela will see imports fall this year and next, the move from self-sufficiency to a major net importer in only a few years shows the crisis beef production is in. Unless Chavez can work a miracle with the new collective farms or farmers are allowed to make a profit without the fear of land seizures, the outlook for beef production over the next few years looks bleak. Venezuela's modern poultry production sector has fared better than beef over the last few years. Growth, however, has also been held back by the price controls. In 2008, production was still well below the level seen in 2002 before the recession and price controls took their toll. In 2009, with feed costs still high, we expect to see a slight decline in production. Things are also looking fairly bleak for Venezuela's coffee growers this year. Coffee production has also been hit by price controls and rising input costs. In 2009, heavy rains have exacerbated an already poor outlook for the year's harvest. We now forecast production to fall 14.9% y-o-y to 851,000 bags. The low outturn could see Venezuela, once one of the world's leading coffee producers, being forced to import coffee to meet domestic demand.
Partial Table of Contents:
-- Full ToC is available at http://www.fastmr.com/
Executive Summary
SWOT Analysis
Venezuela Agricultural SWOT
Industry Business Environment Overview
Supply Demand Analysis
Venezuela Cocoa Outlook
Table: Venezuela Cocoa Production, Consumption & Trade
Table: Venezuela Cocoa Production, Consumption & Trade
Venezuela Sugar Outlook
Table: Venezuela Sugar Production, Consumption & Trade
Table: Venezuela Sugar Production, Consumption & Trade
Venezuela Dairy Outlook
Table: Venezuela Milk Production, Consumption & Trade
Table: Venezuela Butter Production, Consumption & Trade
Table: Venezuela Cheese Production, Consumption & Trade
Table: Venezuela Whole Milk Powder Production, Consumption & Trade
Table: Venezuela Milk Production, Consumption & Trade
Table: Venezuela Butter Production, Consumption & Trade
Table: Venezuela Cheese Production, Consumption & Trade
Table: Venezuela Whole Milk Powder Production, Consumption & Trade
Venezuela Livestock Outlook
Table: Venezuela Poultry Production, Consumption & Trade
Table: Venezuela Pork Production, Consumption & Trade
Table: Venezuela Beef & Veal Production, Consumption & Trade
Table: Venezuela Poultry Production, Consumption & Trade
Table: Venezuela Pork Production, Consumption & Trade
Table: Venezuela Beef & Veal Production, Consumption & Trade
Venezuela Coffee Outlook
Table: Venezuela Coffee Production, Consumption & Trade
Table: Venezuela Coffee Production, Consumption & Trade
Venezuela Grain Outlook
Table: Venezuela Wheat Production, Consumption & Trade
Table: Venezuela Corn Production, Consumption & Trade
Competitive Landscape
Table: Agricultural Commodity Producers & Traders
Table: Agribusiness Suppliers
Table: Integrated Agricultural Producers
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