Disruptions to animal protein industries will continue but growth opportunities will emerge says Rabobank

Global meat producers face a leadership test as the disruptions affecting food markets pose challenges but also bring opportunities to drive long-term growth, according to Rabobank’s latest annual Global Animal Protein Outlook.

The report, which which analyses meat and seafoods markets around the world, predicted that although the disruption that has permeated sectors throughout 2021 will persist next year, progressive animal protein businesses can turn the changes within the market into an opportunity for growth.

“Those that show agility and resilience in embracing a rapidly evolving global market will be best placed to make the most of the opportunities for growth that will be presented to them, said Justin Sherrard, global strategist for animal protein at Rabobank.

“This won’t be easy. Shifting consumer tastes and channels, biosecurity issues and Covid-19 disruption are hurdles meat producers need to clear. But those that show the ability to do so will emerge as the real winners in 2022.”

The Rabobank research highlights the four areas of cost inflation pressures in animal feed, labour, energy and freight faced by animal protein supply chains, but suggested that agile business leadership will be the most likely route to sustainable growth, and advised firms to embrace consumer preferences for sustainability and to be prepared for a surge in demand as economies continue to reopen and adjust following Covid-19-induced lockdowns.

Pork

The Chinese pork market’s ongoing recovery from African Swine Fever (ASF) will be a major driver of its domestic production levels, reducing its dependence on imports from Europe, Brazil and North America. The bank expects a broader increase in supply in the global market will push overall pork prices down globally.

Beef

Global beef production will decline marginally, reflecting changes in herd cycles in major producing regions. The strength of demand for beef in most markets, given this tightening of supply, will keep cattle and beef prices at firm levels into 2022.

Poultry

Rabobank expects the poultry market to recover from a mixed year which has seen high demand stimulate growth despite outbreaks of avian influenza (AI), high feed costs and labour issues. The bank forecasts global production growth of about 2 %, ranging from 1% to 5% in the major markets in 2022, as demand continues to be strong.

Sustainability

Rabobank said the focus on sustainability is likey to increase further in 2022, as food retailers and foodservice chains actively position on this theme with consumers and regulators. Opportunities will emerge for animal protein chains that require minimal incentives to transition to more sustainable production systems.

Mr Sherrard added: “With economies reopening it would be natural to conclude that trade will recover in tandem, but our research shows a mixed picture. The main feature of global trade will be the ongoing decline in China’s pork imports in 2022, which will exacerbate the over-supply situation in Europe. Beef trade should remain active and poultry trade should increase, pending resolution of temporary, biosecurity-related barriers. The boom in trade should come from shrimp and salmon, as exporters respond to demand recovery in many markets.”

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