“Rabobank expects animal protein production to increase in all regions, with total production growth once again surpassing the 10-year average,” said Justin Sherrard, global strategist – Animal Protein at Rabobank. “This strong production increase is mainly being driven by Brazil, China, and the U.S.”
Looking at production across species, beef joins pork as a strong contributor to global expansion. In 2018, global beef production is expected to expand for a third consecutive year, and global pork production is expected to see another year of significant expansion. Poultry production is also expected to grow, but will be down slightly compared to 2017.
In seafood, aquaculture continues to drive seafood supply growth. Sustainable growth in the seafood industry solely depends on aquaculture, although the wild catch industry is expected to recover after El Niño recedes in 2017. Zooming in, the salmon market is recovering, fishmeal prices will stabilize, and the shrimp industry is likely to continue growing.
“The Rabobank trade scorecard for 2018 shows that many countries are looking to increase exports, and this will be a major part of the increased competition we expect in 2018,” Sherrard said.
While specific trade outcomes also will reflect growing demand, access issues and policy decisions, Rabobank said it expects trade to represent an important area of both opportunity and uncertainty over the coming year. Uncertainty in 2018 will come from the heavy overlay of politics in trade policy — such as the NAFTA negotiation, Brexit and the U.S.-China trade relationship — which is not new but does seem to have become more common, and from biosecurity issues such as Avian Influenza, African Swine Fever and EHP (a fungal infection in shrimp), which again appear susceptible to political involvement.
“Trade should be the top-of-mind issue for global animal protein as we head into a new year, and enhancing competitiveness is going to be critical for success,” he said.
Regional outlooks
- North America: Production continues to grow. Ongoing production expansion across the species increases the dependence on trade, yet access to trade markets will be an area of uncertainty during 2018.
- Brazil: Production will increase in 2018. Brazil and Argentina are set to increase beef production by 5% and 4%, respectively, with Brazil also expanding poultry and pork production.
- E.U.: Exports are key in a challenging market. Access to export markets is increasingly important for processors, as production rises, while social issues remain top of mind for domestic consumers.
- China: Pork supply will increase, poultry will stay flat. China’s pork market is entering a down cycle, with imports set to rise as structural adjustment continues. Overall poultry supply will be flat, with white bird supply declining and other species rising. Beef supply will grow steadily, with imports being the main driving force.
- Southeast Asia: Production growth will decelerate. Poultry production is tapering off in response to oversupply. Beef demand will continue to be met by imports, with price being the main focus in trade decision making.
- Australia and New Zealand: Beef and lamb production will remain steady. Improved seasonal conditions support Australian producer demand for cattle amid softer export markets, while in New Zealand, beef exporters are reliant on continued demand growth in export markets.
