NETHERLANDS, Utrecht. While global meat consumption continues to rise, a supply-driven and more competitive market will create challenges for producers, putting pressure on prices and margins, according to Rabobank’s new report Prices under Pressure in a Supply-Driven Market: Global Outlook for Animal Protein in 2017.
According to Justin Sherrard, Global Strategist Animal Protein are prices expected to come under pressure next year – a boon to consumers, but a clear challenge for producers and processors. With rising demand, Rabobank forecasts that China will maintain its 2016 record levels of pork imports next year and could increasingly seek something akin to ‘imports-plus’, locking in supply as it targets food safety and security for its growing population.
Meanwhile, US producers head into 2017 grappling with the potential of changes to the country’s trade policy and further currency movements. Indeed, with worldwide currency fluctuations depending on political machinations as well as central bank decisions, they are becoming accustomed to expecting the unexpected.
Elsewhere, Rabobank predicts an increasingly complex production market, making it more challenging for producers to exploit opportunities. They may come under additional pressure to adapt their systems to mitigate threats, including the focus on antibiotics use, the attention on livestock as a source of greenhouse gases and growing retailer competition. This complexity is creating new growth opportunities for the producers and processors that read the market well and respond swiftly. They are likely to respond by strengthening supply chains, co-ordinating inputs and increasing transparency to improve traceability in supply chains.