Seeking opportunities in an uncertain world

In 2020, global animal protein faces an uncertain world, but opportunities can still be found. African swine fever dominates the outlook, having generated unprecedented change in 2019 – and the Rabobank expects more in 2020. Trade disputes and sustainability are other notable challenges in the global animal protein complex. But there are also opportunities in global animal protein, such as recovery from ASF, winning on sustainability, and investing to secure ongoing trade flows.

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.

Across species, aquaculture and poultry will lead production growth in 2020, with beef stable, and wild-catch seafood in decline. All of these changes are minor compared with the production decline in pork.

Adding to 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.

At present, sustainability is slightly less prominent than the above issues. However, in Rabobanks view, it is just as important, as it will shape the growth of animal protein production and consumption through the 2020s.

Despite these uncertainties, there are also opportunities in global animal protein:
> The most obvious area of opportunity is recovery from ASF, which, in the banks 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
> Investing to secure ongoing trade flows can also be an opportunity, as this can reduce some of the uncertainty and secure continuous market access

Regional outlooks

These are our key points for the main global animal-protein producing regions:

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.

Europe

Poultry and pork production are set to rise, with pork growth driven by export opportunities. Beef production, however, 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.

Brazil

Production growth is expected for all species in 2020. Export opportunities are the main driver here, although domestic demand is also improving.

South-East Asia

ASF is expected to spread further in 2020, impacting pork production. Partly in response to this, Poultry production will again rise strongly in 2020. Beef production, on the other hand, remains flat, but imports are on the rise.

Australia & New Zealand

Tight livestock inventories in Australia will see beef production down and sheep meat production stable in 2020, with firm prices for both. We expect New Zealand’s beef and sheep meat production to rise, with favorable price levels.