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rabobank food report

4 findings from Rabobank Food & Agribusiness report

More competitive market expected to create challenges for livestock producers in 2017.

A new report from the Rabobank Food & Agribusiness Research and Advisory group, "Prices Under Pressure in a Supply-Driven Market: Global Outlook for Animal Protein in 2017," finds that consumers are set to benefit from downward pressure on global meat prices in 2017.

Among the findings:

-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, Rabobank forecasts.

Rabobank report, "Prices Under Pressure in a Supply-Driven Market: Global Outlook for Animal Protein in 2017," finds China will continue to exert a huge influence on global meat markets. (Photo: purestock/Thinkstock)

-Rabobank predicts that China will continue to exert a huge influence on global meat markets. The world’s most populous country increased pork imports to record levels in 2016 and Rabobank forecasts these import levels will remain constant next year. China’s beef and poultry imports are also expected to rise.

-In the U.S., production is expected to continue growing, but consumers’ appetites are being tested as record levels are reached. The strong dollar and uncertainty over future trading relationships with China and Mexico create potential headwinds for American producers. The U.S. is currently the world’s largest exporter of pork to China, excluding the EU.

Justin Sherrard, Rabobank’s global strategist – animal protein, said: “In a market driven by supply, we expect prices to come under pressure next year – a boon to consumers, but a clear challenge for producers and processors. Meanwhile, U.S. 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, we are becoming accustomed to expecting the unexpected.”

-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.

Justin Sherrard added: “The onus is very much on producers to mitigate the concerns of consumers, particularly around animal health and welfare issues, by adapting their production models and supply chains. This is a challenge which will continue to be a major theme in 2017.”

Rabobank’s Global Outlook for Animal Protein is produced annually.

Source: Rabobank

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