AVN Web Desk
In its annual global animal protein outlook report, Rabobank forecasts a deceleration in the growth of animal protein production in 2024, attributing this shift to tight profit margins, while after four years of consistent growth in global production, certain species are expected to witness a slowdown or even a decline.
Producers and processors are grappling with challenges navigating tighter margins caused by structural changes in market conditions. Higher production costs and limited supplies are anticipated to result in increased animal protein prices, potentially constraining global consumption in 2024.
Despite expectations of decreasing input costs and inflation, they are projected to remain elevated compared to the pre-pandemic period. Consumer adaptation to higher prices is evident in some markets, where consumers are willing to pay a premium for quality.
Rabobank identifies specific market changes as permanent, including demographic shifts leading to a tighter labour market and higher production costs, as well as reduced population growth affecting consumption.
Pressure to invest in upgrading production systems to meet emerging market needs, comply with regulatory requirements, and cater to changing consumer preferences focused on sustainability is also noted. Challenges such as adverse weather conditions and disease outbreaks loom on the horizon.
Justin Sherrard, Global Strategist for Animal Protein at Rabobank, stresses the need for adaptation in the face of these challenges. He states, “Companies in the animal protein supply chains have demonstrated remarkable resilience and adaptability, continuing to grow production and meet customer expectations despite challenging market conditions.”
To sustain success, Sherrard suggests that animal protein businesses should focus on enhancing productivity, reviewing portfolios, strengthening supply chain partnerships, increasing investments in new product development, and adjusting pricing strategies.
Rabobank’s analysts project marginal year-on-year production growth in major markets like North America, Brazil, Europe, Oceania, China, and Southeast Asia, with an increase of 0.6 million tons (0.5pc) to a total of 247 million tons in the coming year. This growth is notably slower than the 2.1 million tons (1pc) observed in 2023.
The report predicts that only poultry and aquaculture will experience production growth in 2024, albeit at a slower pace than in 2023. Beef production is expected to continue its decline, influenced by changes in cattle cycles in North America, while pork production will also see a modest contraction.
Justin Sherrard concludes by saying that amidst the challenges, there are opportunities for businesses to enhance processes and products, suggesting that companies capable of adapting to the evolving landscape, responding to consumer preferences, and demonstrating agility in this challenging market are likely to thrive.
