Global meat producers are set to face a leadership test in 2022 as the disruptions affecting food markets pose challenges as well as create opportunities, according to new research from food and agribusiness banking specialist Rabobank.
In the report Global Animal Protein Outlook 2022, Rabobank says that while the disruption that has permeated sectors throughout 2021 will persist next year, progressive animal protein businesses will see the changes within the market as an opportunity for growth rather than solely as a risk.
“Rabobank sees agile business leadership as the most likely route to sustainable growth and is advising firms to embrace consumer preferences for sustainability and to be prepared for a surge in demand as economies continue to reopen and adjust following Covid-19-induced lockdowns,” global strategist for animal protein at Rabobank Justin Sherrard said.
On a consumer level, Rabobank expects demand for beef to remain solid, demand for salmon and shrimp to show ongoing strength, improving demand for poultry and strong sales of alternative proteins.
Genevieve Steven - Sheep and Beef Research Analyst
“Traditional meat producers won’t have time to lick their wounds after a challenging 2021. Those that show agility and resilience in embracing a rapidly evolving global market will be best placed to make the most of the opportunities for growth that will be presented to them,” Mr Sherrard said.
“This won’t be easy. Shifting consumer tastes and channels, biosecurity issues and Covid-19 disruption are hurdles meat producers need to clear. But those that show the ability to do so will emerge as the real winners in 2022.”
Sustainability demands offer opportunities for growth for meat producers
The report says Rabobank expects the focus on sustainability to increase further in 2022, as food retailers and foodservice chains actively position on this theme with consumers and regulators.
“Opportunities will emerge for animal protein chains that require minimal incentives to transition to more sustainable production systems,” Mr Sherrard said.
“Sustainability will also support ongoing investments in alternative protein and appeal to a growing customer base. In this dynamic market the bank forecasts increased production and new product development in 2022.”
New Zealand outlook
The report says the pricing outlook for New Zealand sheepmeat and beef remains positive despite mounting supply chain challenges and costs.
“We expect sheepmeat prices to stay above the five-year average in 2022, but they will likely ease from the highs recorded over recent months,” RaboResearch Analyst Genevieve Steven said.
“Export demand from China and the US is expected to remain steady, but any potential easing of US consumer demand or increased shipping prices could see New Zealand export prices decline.”
“High freight costs will likely continue to impact New Zealand exporters in 2022 and balancing these costs through the supply chain will be a key challenge.”
The report says New Zealand’s beef producers can also look forward to pricing above the five -year average in the year ahead as the global beef market rebalances.
“Ongoing lower supplies of Australian lean trimmings into the US are expected to be positive for New Zealand bull beef, however, strengthening of the NZD/USD could ease returns for New Zealand exporters.,” Ms Steven said.
“The potential easing of US consumer demand could also harm New Zealand export prices, but we do expect to see demand from China remain steady as New Zealand retains good access.”
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 is structured as a cooperative and operates in 40 countries, servicing the needs of about 10 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 32 offices throughout New Zealand.
Media contacts:
David Johnston
Media Relations Manager
Rabobank New Zealand
Phone: 04 819 2711 or 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