Rabobank: World meat production will decline in 2022

Rabobank said higher production costs for animal protein supply chains will be the main drivers of change, with constant change driven by the shift to more sustainable animal protein, biosecurity concerns and covid-19.

In 2022, the global animal protein market expects the same level of uncertainty, according to a Rabobank forecast. While markets are expected to stabilize somewhat in 2022, many of the drivers of recent change will remain. Among these, higher production costs for animal protein supply chains, including animal feed, labor, energy and freight, will be the main drivers. They will be accompanied by constant changes caused by the transition to more sustainable animal protein, biosecurity issues and Covid-19.

The overall trend for 2022 is continued but slower growth in production from pork, poultry and aquaculture. it is expected that the production of beef and wild animals will decrease slightly. The ongoing recovery in China's pig population will be the biggest driver of growth in global markets in 2022, analysts say. Against this backdrop, animal protein prices should remain stable in 2022 (with a few exceptions), supported by continued supply constraints and an overall increase in demand. “We expect the leaders of progressive animal protein companies to focus on the opportunities created by the ongoing market disruption, rather than view multiple changes as business risks only,” said Justin Sherrard, global strategist at Animal Protein.

According to the report, domestic pork consumption in Europe needs to rise to balance the markets. At the same time, despite higher costs, the poultry industry must improve the opening of all channels. In addition, Southeast Asia's poultry sector is expected to pick up production after two years of severe Covid-19 impacts. Pork will also recover from exposure to ASF and Covid-19, but at a slower rate. Meanwhile, in CHINA, the recovery in pork production is expected to continue, but the path remains uncertain while consumption and prices remain low. Demand for beef will remain strong, while poultry will be pressured by a recovery in pork.

In North American markets, continued growth in demand will support production and prices. Production restrictions can spoil the result, which is considered a positive year. Brazil will continue its rise as one of the top MEAT exporters, although domestic demand is also growing, while Australia's beef and lamb supply will gradually improve. Continued demand for New Zealand exports and limited supply are positively impacting profitability, the report said.