Expanding global production to increase competition in 2018
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Expanding global production set to increase competition in meat sector in 2018



Global meat production is forecast to expand in 2018, intensifying trade competition in international markets and seeing different types of animal proteins increasingly vie for the consumer dollar, according to a newly-released international report.

Rabobank’s Global Animal Protein Outlook for 2018 expects production increases in all major regions of the world with total growth once again surpassing the 10-year average. Australian meat production is forecast to increase slightly, as the country’s beef herd and sheep flock rebuild from recent years’ lows.

The increased availability of animal protein around the world will fuel competition, creating downward pressure on prices and margins and increasing the focus on trade, according to Rabobank’s Australian-based senior animal proteins analyst Angus Gidley-Baird.

Rabobank expects trade to represent an important area of both uncertainty and opportunity for the global animal proteins sector over the coming year, Mr Gidley-Baird said. “Trade will be the top-of-mind issue for global animal protein as we head into a new year, and enhancing competitiveness is going to be critical for success.

Brazil, China and the US will be the main drivers of global meat production growth in 2018, according to the report.

And in terms of animal species, beef will join pork as a strong contributor to global expansion of production.

“In 2018, global beef production is expected to expand for a third consecutive year, and pork production is set to see another year of consecutive growth,” Mr Gidley-Baird said. “Global poultry production is also expected to growth, but the rate will be down slightly on 2017.”

For seafood, aquaculture will continue to drive seafood supply growth around the world. “Sustainable growth in the seafood industry solely depends on aquaculture, although we expect the wild catch industry to recover after El Nino recedes in 2017.


For Australia, the report says, with a return to more favourable seasonal conditions, beef production in 2018 is expected to see its first year-on-year increase since the high cattle slaughter in 2014, which occurred during prolonged drought in much of Queensland and northern New South Wales.

Mr Gidley-Baird said a forecast three per cent growth in beef production in Australia in 2018 would put total production levels back up near the longer-term average of about 2.1 million tonnes cwt (carcass weight).

The reports says Australia’s cattle slaughter numbers are expected to be slightly below the long-term average in 2018.  “This reflects a lower cattle inventory of 27.5 million head, as well as heavier average carcass weights (at close to 300 kilograms), following improved seasonal conditions and increased numbers of cattle on feed,” Mr Gidley-Baird said.

For Australian beef prices, the report says, the large volume of beef in the global market will exert downward pressure.  Although this will be countered by limited supplies of young cattle for rebuilding.

“Prices have declined from their record highs of late 2016 and notwithstanding a sudden deterioration in the season prices are expected to ease slightly from current levels as cattle numbers increase,” Mr Gidley-Baird said.

The report forecasts Australian lamb production in 2018 to remain at similar levels to 2017. Overall sheepmeat production is expected to increase marginally.

Mr Gidley-Baird said mutton production was forecast to increase following a period of low sheep slaughter as producers held on to ewes.

“2017 has seen lower slaughter numbers given the reduced flock we’ve had here and the improved seasonal conditions,” he said, “while improved wool prices have also been supporting retention.

Rabobank forecasts lamb and sheep prices to remain at strong levels through 2018. However, the report notes, prices will be challenged domestically by falls in the price of other proteins. Demand from export markets is expected to remain solid, given lower New Zealand production, Mr Gidley-Baird said.

Other issues 'on the grill'

Looking beyond markets and trade, the report highlights four other issues Rabobank believes will dominate the animal proteins sector in 2018 increasing albeit uneven industry consolidation, an evolving retail landscape with more products available through more channels, the growth of alternative proteins and new technology both on farm and in the supply chain.

Rabobank Australia & New Zealand is a part of the global Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has nearly 120 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 40 countries, servicing the needs of approximately 8.6 million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand is one of Australasia’s leading agricultural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 94 branches throughout Australia and New Zealand.

Media contacts:

Denise Shaw
Head of Media Relations
Rabobank Australia & New Zealand 
Phone: 02 8115 2744 or 0439 603 525 
Email: denise.shaw@rabobank.com  

Skye Ward
Media Relations Manager
Rabobank Australia
Phone: 02 4855 1111 or 0418 216 103
Email: skye.ward@rabobank.com