While companies have already faced rising input prices, supply chain distribution issues and geopolitical issues, prices in 2023 are likely to be supported by high feed costs and increased energy prices.
In its Global Animal Protein Outlook report, Rabobank says animal protein production in key markets is expected to increase by 5 million tonnes – or 1% – next year to a total of 430 million tonnes.
This will be due to expected strong demand for poultry, fish and seafood as these continue to be viewed as value for money offerings. These gains will offset weaker performance in the beef and pork sectors, which consumers view as more expensive. However, the growth rate will be lower than the 2% recorded this year.
Slow growth is expected for all species in China, and continued growth is also expected in Brazil and Southeast Asia and Oceania, while production in North America and Europe will decline.
It’s been a year like no other for the animal protein industry.
Emission Obligations
Rabobank expects manufacturers and processors to step up their emissions commitments over the next year, but this will require bigger investments in areas like smart data to make their operations and supply chains more sustainable.
Proactive approach
The most successful companies, the company argues, are also moving on a more proactive basis to manage disease risks like bird flu and swine fever. These include sensors that can detect unusual animal movements and predictive technologies to detect animal health and welfare issues and limit herd and herd losses.
Meanwhile, retailers are responding to higher costs by downsizing pack sizes and reducing assortments. Therefore, animal protein companies need to consider consumer behavior in a recessionary environment, e.g.
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Challenging Markets
Commenting on the report, Justin Sherrard, global animal protein strategist at Rabobank, said the past year has been immensely challenging: “It has been a year like no other for the animal protein industry. Businesses are grappling with rising input prices, supply chain disruptions and geopolitical conflicts, many of which remain unresolved as we head into 2023. These factors have increased costs across the market, but while prices are rising quickly, they tend to fall more slowly.
“We therefore expect prices to remain high next year even as the market sees steady production growth due to a growing supply of aquaculture and poultry. This masks a fall in beef supply due to the contraction in the US after years of drought and the flagging pork market in Europe,” Sherrard added.
longer term
Looking further ahead, Sherrard said increasing awareness of carbon footprints and a proactive approach to treating disease would continue to provide opportunities for the most forward-thinking companies to invest and thrive.
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