19 November 2020 - Rabobank predicts global African swine fever (ASF) and COVID-19 recovery will continue to be the biggest drivers for change in the global animal protein market in 2021.
Globally growth is expected across all of the animal protein industries - with the exception of non-farmed fish - despite the ongoing impacts of disease outbreaks currently affecting both humans and animals.
China’s ability to recover from ASF will have major impacts on the rest of the world’s animal protein production and trade, as imports and demand for pork-alternatives slows upon China’s pork herd recovery. China is forecast to grow its pig herd by 10%, more than in 2020, returning stock levels to 80% of what they were before the ASF outbreak took hold in 2019.
Poultry imports in 2021 are expected to decrease in China, while poultry production increases due to the expansion of breeding capacity in the last few years, and a focus on alternatives to pork in the wake of the ASF crisis.
In South East Asia, Vietnam looks set to continue its better-than-expected pork production from this year into 2021, with 15% year-on-year expansion predicted thanks to nationwide herd growth. However, the picture does not look so good in the Philippines, where continued ASF outbreaks and a reliance on small-scale farms can expect the country to see 3% losses in it’s pork production for 2021.
The knock-on effects of China’s predicted recovery will see European pork exports fall, while production is expected to decrease by 0.5% in Europe, the same rate as this year. This rate of decline is influenced further by growing ASF uncertainty in large parts of mainland Europe, particularly in Germany where cases have increased towards the end of the current year.
Overall European production balance is upheld by predicted strong production growth in Spain, who are expected to overtake Germany as Europe’s largest producer of pork.
The outlook for poultry in Europe in 2021 is far more uncertain. COVID-19 has had huge impacts on food service sales this year - a market estimated to account for 20-40% of poultry sales - meaning the market was oversupplied with low priced produce. Despite this, small production growth of 0.4% is forecast for EU poultry, with growth of 0.3% predicted for exports, despite a reduction in exports to China and Southeast Asia as demand for pork-alternatives decreases.
In North America beef production is expected to show the strongest growth in 2021, with the US and Canada seeing 1.5% and 6% production growth respectively. However, as China’s pork herd recovers and their reliance on imports decreases the growth of the North American pork industry is expected to slow to 1.6% in 2021.
Poultry production across North America had been set at 1.8% for 2020, however, that figure was curbed early into the pandemic. Moving into 2021 disappointing margins and rising feed costs will limit production growth to 0.9%, halving the estimate for last year.
Much like in the rest of the world, Brazil and Argentina’s beef production and exports will be linked heavily to developments in China, after a fall in domestic consumption in 2020 for both nations. Production is expected to increase by 2.5% in Brazil thanks primarily to their export ties with China, while production is expected to decline by 1.5% in Argentina after a record drop of 800,000 heads in 2019 (fuelled by exports to China) has left the herd in recovery.
Brazil can also expect pork production to grow by 2.5% in 2021 and poultry by 1%, thanks to strong performances in 2020.
In the aquaculture industry record-low supply growth has been forecast for salmon, largely due to smolt number reductions in Chile throughout 2020 leading to an expected 8-9% contraction in salmon supply. Despite this, growth is still forecast globally for aquaculture, albeit at only 0.5-2%.
2021 is expected to be a recovery year for shrimp after a 10% supply contraction was experienced in 2020, caused by the COVID-19 pandemic creating a huge shift in consumption away from the food service market to the retail market. It is hoped that supply will rebound by 8% in 2021.
Rabobank expects that in 2021, COVID-19 will continue to impact all areas of animal protein production and distribution as recovery takes place across every aspect of the industry, from labour availability to global recovery of food service industries. Additionally, the effects of COVID-19 on traditional buying habits could forever change the outlook of some animal protein markets.