Rabobank - Poultry and aquaculture production will lead in 2024, beef and pork production will decline

Poultry and aquaculture production is projected to see moderate growth, but production of beef, pork and wild-caught seafood is likely to decline.

Animal protein growth will slow as margins remain tight in 2024 and producers and processors will have to adapt for sustainable success, according to Rabobank's annual Global Animal Protein Outlook report.

After four years of growth in global animal protein production, the growth rate of some species will slow or even decline in 2024, according to specialist food and agribusiness bank.

This shift comes as producers and processors face declining margins due to structural changes in market conditions. Higher production costs and tighter supplies will push up animal protein prices and limit global consumption in 2024.

Manufacturing costs and inflation are likely to decline but remain higher than pre-pandemic levels. There are also signs that consumers are becoming accustomed to higher prices and, in some markets, are willing to pay more for quality.

Some market changes appear to be permanent, Rabobank notes. Demographic shifts will tighten the labor market and raise production costs, while declining population growth will slow consumption.

In other countries, it will be necessary to invest in upgrading production systems to meet the needs of emerging markets, meet regulatory requirements and meet changing consumer preferences for sustainability. Adverse weather conditions and disease also pose problems.

Justin Sherrard, global animal protein strategist at Rabobank, said: “That they continue to ramp up production and meet customer expectations in such challenging market conditions is testament to the resilience and flexibility of companies in animal protein supply chains. Even as the cost of living crisis puts pressure on consumer finances, demand for animal protein remains strong and companies have been able to overcome challenges, from high costs to regulatory uncertainty and disease, to capitalize on it.

For companies to maintain the success of the past few years, it is important that they adapt to structural changes in the market. Rather than simply weather the storm, animal protein businesses need to take stock of their strengths and prepare to transition their supply chains to operate in a high-cost, tight-margin environment.

Companies should redouble efforts to improve their productivity, review their existing portfolios, strengthen supply chain partnerships, increase investment in new product development and adjust their pricing strategies to meet the challenges of the coming year.”