Rabobank publishes 2020 global animal protein outlook
Rabobank, a Dutch cooperative bank, has published its annual global animal protein outlook for 2020, with key factors including African swine fever and trade opportunities.
RaboResearch Food & Agribusiness, a cooperative bank in the Netherlands that focuses on international business and rural activities, has published its annual global animal protein outlook.
In general, it is said that African swine fever (ASF) overwhelms the outlook for 2020 – as it has done during 2019 – and will pull down overall growth, as well as bring uncertainty to all markets.
“Besides the impact of ASF, many trade disputes and issues are causing uncertainty for global animal protein, with the US-China trade war the most apparent, but not the only, trade uncertainty. In addition, the ongoing rise of alternative proteins also adds to the uncertainty,” said Justin Sherrard, Global Strategist Animal Protein at RaboResearch Food & Agribusiness.
The report also covers sustainability developments, which are considered slightly less prominent. However, Sherrard added: “In our view, sustainability is just as important as other areas of uncertainty, as it will shape the growth of animal protein production and consumption through the 2020s.”
Despite the uncertainties, there are also said to be opportunities. “The most obvious area of opportunity in global animal protein is the recovery from ASF, which, in Rabobank’s view, will extend through the 2020s. Winning on sustainability is another opportunity, which can be achieved by harnessing the supply chain and moving ahead of market signals. Finally, investing to secure ongoing trade flows can also be an opportunity, as this can reduce some of the uncertainty and secure continuous market access”, Sherrard added.
Rabobank expects growth in most regions in 2020, but the impact of ASF in Asia overwhelms the outlook. In particular, China’s production losses are predicted to exceed the growth in all other regions combined. Across species, aquaculture and poultry will lead production growth in 2020, while beef will be stable, and wild-catch seafood will decline again. All of these changes are said to be minor compared with the production decline in pork.
With regard to seafood, RaboResearch predicts a modest growth of salmon supply, with Norway expected to be the main supply driver in 2020. The shrimp industry is also said to be set for growth, despite low prices, with Ecuador, followed by Vietnam and Indonesia, leading production gains.
The fishmeal market will allegedly see both lower supply and lower demand in 2020. ASF has impacted the demand for fishmeal in piglet feed in China, countering the effect of lower supply in 2019 and Rabobank expects a similar pattern for 2020.
Rabobank’s breakdown of protein outlook:
- North America: Rabobank expects production for all species to rise in 2020 – led by pork, followed by poultry, and finally beef. While domestic consumption will grow, exports will need to pick up to manage this production growth
- Brazil: Production growth is expected for all species in 2020. Export opportunities are the main driver, although domestic demand is also improving
- Europe: Poultry and pork production are set to rise, driven by export opportunities. Beef production is expected to decline, in response to soft consumption
- China: ASF dominates the outlook, with a further decline in pork production in 2020. Production will grow for all other species, given the pork shortage and prices at high levels
- South-East Asia: ASF is already affecting pork production and is expected to spread further in 2020, impacting production. Poultry production will again rise strongly in 2020, partly in response to ASF. Beef production remains flat, but imports are on the rise
- Australia and New Zealand: Tight livestock inventories in Australia will see beef production down and sheepmeat production stable in 2020, with firm prices for both. Rabobank expects New Zealand’s beef and sheepmeat production to rise, with favourable price levels.