Meat price stability ‘threatened’ for 2019
A ‘melting pot’ of risks are threatening global meat price stability, according to Rabobank’s annual outlook report Growth Slows Down…As Doubt Gears Up.
Major outbreaks are affecting global trade and consumer preferences, and as a result, a shift to beef consumption is expected.
Rabobank’s report reveals that while meat markets will continue growing in 2019, the risks of an El Niño (a warm phase of the El Niño Southern Oscillation) weather system are bringing great uncertainty to the outlook for 2019.
In addition, the trade war between the US and China has played a part in shaping 2018, and if, as expected, it continues into 2019, it will alter global trade flows in the year ahead and beyond.
Justin Sherrard, global strategist for animal protein at the bank, added: “Meat producers face a melting pot of risks. Although it’s possible that not all of them will come to pass, they need to be prepared for a difficult and worrying year in 2019.”
A window of opportunity
However, as a result of the US and China trade war, US meat exporters are said to be looking for new trading partners outside of China.
This should provide a ‘window of opportunity’ for many other countries, including the EU, Australia, Brazil, Canada, and Russia, who will all be looking to fill the place in the Chinese market created by US absence.
Sherrard added: “As we look into 2019, we see animal protein trade flows continuing to be shaped not only by US trade disputes, but also by issues in Brazil, ratification of the Comprehensive and Progressive Trans Pacific Partnership, and Brexit.”
Biosecurity risks look set to spread
Rabobank expects the spread of African Swine Fever (ASF) to continue to have a global impact on pork production, proving especially harmful in China with a decline in supply, rising prices and higher imports.
Europe still faces an oversupply of pork, and this will become a particular issue if an ASF outbreak hits production and results in a drop off in export opportunities.
But with pork being the animal protein most at risk of disease, it’s likely to impact consumer perceptions, and as a result, demand.
It’s a similar story in the poultry market, as the growing risk of Avian Influenza can cause consumer concern and lead to significant volatility in trade streams.
Sherrard concluded: “With the severity of disease outbreaks showing no signs of being curbed, especially in pork and poultry, biosecurity will become a higher business priority for livestock and fish producers in the year ahead. Major outbreaks are affecting global trade flows and consumer preferences, and as a result we expect to see a shift to beef consumption in some markets.
“It’s often the more challenging periods like this that can enable animal protein companies to reap rewards, providing they successfully navigate the uncertainty.”
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