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Global animal protein producers and processors must pivot in 2023 to secure future

Animal protein producers and processors around the world will face an “inflection point” in 2023, with a need to respond to structural changes in the market even with production levels and prices likely to remain elevated, according to a new report by agribusiness banking specialist Rabobank.

In its Global Animal Protein Outlook 2022 – Deciding How to Grow Amid Challenges and Opportunities, Rabobank says producers and processors of red meat, pork, poultry and seafood approach 2023 after a year marked by a host of obstacles.

“It has been a year like no other for the animal protein industry. Companies have grappled with rising input prices, supply chain disruption and geopolitical strife, many of which are unresolved as we head into 2023.

These factors have increased costs across the market, but while prices rise quickly, they tend to fall more slowly,” report lead author Justin Sherrard, Global Strategist for Animal Protein at Rabobank said.

Rabobank agricultural analyst, Genevieve Steven

Rabobank agricultural analyst, Genevieve Steven

We therefore expect prices to remain high next year, even as the market enjoys steady production growth on the back of a growing supply of aquaculture and poultry. This masks reductions in the supply of beef, due to contraction in the US after years of drought, and the weakening pork market in Europe.

The report says animal protein production levels are expected to increase by five million tonnes - or one per cent - to a total of 430 million tonnes next year. However, the production growth rate will be lower than the two per cent recorded in 2022.

Salmon is set to continue to enjoy strong demand, with weak supply growth supporting prices, Rabobank predicts. Chicken will benefit from its value proposition against the tough economic backdrop, with the bank forecasting global economic growth of just two per cent in 2023. By contrast, consumers are likely to cut back on more expensive cuts of meats, such as fillet steaks.

Structural and cyclical themes

At a structural level, the report says, global industry participants face the need to adapt to sustainability challenges and ongoing bio security risks if they are to remain competitive in the market over the longer-term.

To prosper in the future, animal protein companies must pivot to become more sustainable businesses, the report says. Rabobank expects producers and processors to intensify their emissions commitments next year, but says this will require greater investment in areas such as smart data to make their operations and supply chains more sustainable.

The most successful businesses are also moving on to a more proactive footing to manage disease risks, such as African Swine Fever and Avian Influenza, Rabobank says. This includes sensors that can recognise unusual animal movements and predictive technology to limit herd loss.

The report says producers and processors must also factor in changing consumption patterns in a recessionary environment, such as the move towards convenience products, like fish fingers and hot dogs, and trading down.

High prices for feed and other input costs are additional factors which have the potential to impact the animal protein industry in 2023 and beyond, according to the report.

New Zealand

Of the global themes identified in the report, report co-author Agricultural Analyst Genevieve Steven said consumer behaviour changes, high input costs and sustainability challenges will be the most significant for New Zealand's red meat producers and processors in the year ahead.

Ms Steven said "prices for New Zealand beef and sheepmeat are expected to soften in 2023 - with sheepmeat prices likely to decrease more significantly than beef - due to changes in consumer behaviour as many of New Zealand's key export markets enter a recessionary environment. High input costs are also expected to remain prevalent in 2023, potentially causing margin pressure for some businesses.

"While the beef price has remained resilient through 2022, we anticipate some easing in 2023, as Chinese consumers face ongoing Covid lockdowns and tighter economic conditions, forcing some consumers to trade down to lower-priced proteins. On a positive note, US demand for lean beef trimming imports is expected to lift as US production enters negative territory. And this should provide price support for New Zealand beef," she said.

"A weaker NZD/USD outlook is also expected to support returns for beef exporters and farmers, helping to hold farmgate beef prices above the five-year price average in 2023".

Ms Steven said the outlook for sheepmeat is a little more turbulent for 2023.

"Significant economic challenges in New Zealand's main export markets – China, Europe and the US - are expected to reduce demand for New Zealand's sheepmeat exports, leading to softer sheepmeat prices", she said.

"Lockdowns in China reduced demand for New Zealand sheepmeat exports in 2022 and are likely to continue having a negative impact on demand in 2023, whilst the zero Covid policy remains in place."

In addition, the recovery of lamb production in Australia is likely to increase competition in these destination markets.

Ms Steven said New Zealand’s sheep and beef sector is also facing sustainability-related pressures that are likely to lead to structural changes in livestock numbers and production over coming seasons.

"These pressures include land-use change from grazing to forestry and the pricing of GHG emissions from agriculture. While these changes have not yet had a significant negative impact on livestock numbers, Rabobank forecasts afforestation will drive a decline in breeding ewe and beef cow numbers of one per cent in 2023", she said.


Rabobank New Zealand is a part of the global Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 120 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank Group is structured as a cooperative and operates in 38 countries, servicing the needs of about 8.4 million clients worldwide through a network of close to 1000 offices and branches. Rabobank New Zealand is one of the country's leading agricultural lenders and a significant provider of business and corporate banking and financial services to the New Zealand food and agribusiness sector. The bank has 28 offices throughout New Zealand.


Media contacts:

David Johnston
Marketing & Media Relations Manager
Rabobank New Zealand
Phone: 027 477 8153
Email: david.johnston@rabobank.com


Denise Shaw
Head of Media Relations 
Rabobank Australia & New Zealand 
Phone: +612 8115 2744 or +61 2 439 603 525 
Email: denise.shaw@rabobank.com