Abstract
In BMI' s Colombia Agribusiness Report for Q3 2009 we introduce the new
Livestock Outlook. Growth in
Colombia' s beef production has been
distinctly unimpressive over the past three decades. Through the
1960s and
1970s beef production more than doubled reaching 664,000 tonnes in 1980. With
the exception
of a few unsustained spikes, production stayed around that
level until the middle of this decade. In the
past few years, growth has
taken off again. From 2004 to 2008, beef production grew 25.4% to 840,000
tonnes.
The recent expansion in the production has been driven by a
combination of healthy economic growth
and the success of President Alvaro
Uribe' s Democratic Security Policy. The improvement of the security
situation has made investors more willing to pump money into expanding
production and has also opened
up new land previously considered too
risky. The world economic slowdown will likely put a stop to the
rapid
growth in beef production for the time being as consumers are forced to cut
their food budgets and
demand for beef falls. Beyond the current turmoil,
however, we expect production to pick up once again
as Colombians have
more money to spend on food. Beef consumption in Colombia at around 13kg
in
2008 is still low by Latin American standards suggesting there is
plenty of room for growth.
While cattle farming was stagnant through the
1980s and 1990s, Colombia' s poultry sector took off. From
1985 to 2005,
poultry production expanded more than fivefold. With production in 2008 at
just over 1mn
tonnes, poultry has now overtaken beef as Colombia' s most
significant meat product on a volume basis.
Far less land intensive than
cattle farming, poultry production has been able to prosper despite the
insurgencies raging in much of the countryside. Demand has also been driven by
the lower price for
chicken when compared to beef. We expect production to
continue growing as larger, more efficient
producers develop.
Away
from livestock, 2009 looks set to be a poor year for Colombian agriculture.
Unusually heavy rains
in the latter months of 2008 and the first quarter
of 2009 have seen yields fall in some of the country' s key
crops. The
coffee harvest is expected to be one of the smallest this decade as the rain
has seen yields
plummet. Even without the weather problems, production was
expected to be lower owing to a fall in
fertiliser use owing to high
prices and the continued work on rejuvenating old trees. In the first
seven
months of coffee year 2009 (October 2008-April 2009) coffee
production was 5.83mn bags, down from
8.27mn in the same period of crop
year 2008.
The weather improved in the second quarter of the year and is
expected to remain good through the rest of
the season. Despite this, we
are forecasting full-year production to be down 13.8% year-on-year at
10.79mn bags. We warn, however, that the harvest could be as low as 10.50mn,
the lowest since 2000.
The fall in production is putting a squeeze on
stocks and coffee imports will rise sharply this year as
traders struggle
to find enough coffee to meet export orders and domestic demand.
| 
View Cart
