Rabobank’s annual Global Animal Protein Outlook report anticipates a slowdown in animal protein production growth in 2024, signaling a shift in the industry dynamics. The report highlights that producers and processors will face challenges due to tighter margins and structural changes in market conditions. As a result, some species, particularly beef and pork, are expected to experience contraction.
The slowdown is attributed to higher production costs and tighter supplies, leading to an increase in animal protein prices and potential constraints on global consumption. Despite expectations of falling input costs and inflation, these factors are projected to remain higher than pre-pandemic levels. The report also notes that consumers, in certain markets, appear accustomed to higher prices and are willing to pay a premium for quality.
Permanent market changes, such as demographic shifts impacting the labor market and reduced population growth affecting consumption, are highlighted by Rabobank. Additionally, there is a call for investments in upgrading production systems to meet emerging market needs, regulatory requirements, and changing consumer preferences regarding sustainability.
Rabobank’s analysts forecast marginal year-on-year production growth of 0.5% in 2024, compared to 1% growth in 2023. Poultry and aquaculture are predicted to lead production growth, albeit at a slower pace than in 2023. Beef production will continue to decline, influenced by changes in cattle cycles in North America, while pork production is expected to contract modestly. Wild catch seafood will revert to its longer-term pattern of declining production after a brief expansion in 2023.
Salmon emerges as a success story for 2024, with a projected 4-5% expansion in supply and increased demand due to its relative price competitiveness against other proteins. However, plant-based meat alternatives are anticipated to experience a decline both in customer interest and investor support, with foodservice being a key buyer in this category.
Regionally, Brazil and Southeast Asia are expected to exhibit the fastest production growth for poultry and meat, while Europe and North America are anticipated to see an overall production contraction.
In response to these market shifts, Rabobank advises animal protein businesses to adapt by focusing on productivity improvements, portfolio reviews, strengthening supply chain partnerships, increased investment in new product development, and adjusting pricing strategies to navigate the challenges anticipated in 2024.
