Europe’s poultry producers can expect “consumption to hold steady” in 2023, but beef and pork consumption could “decline slightly” next year, according to a new research report from Rabobank.
The Global Animal Protein Outlook published by RaboResearch today (Monday, December 5) outlines that it will be another “year of change for the sector”.
The report also highlights that producers and processors of meat, poultry and seafood are approaching 2023 after a year marked by “rising input prices and supply chain disruption”.
The RaboResearch report notes that producers and processors also face the “need to adapt to sustainability challenges and disease threats to animal health if they are to remain competitive in the market over the longer-term”.
In its Global Animal Protein Outlook 2023 report, RaboResearch outlines that prices paid for animal protein in 2023 will be “supported” by high feed costs and elevated energy prices.
High costs in 2023
Looking back on 2022 Justin Sherrard, global strategist for animal protein at Rabobank, said it had 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,” he added.
Rabobank’s latest research suggests that animal protein companies will “face high costs along the full supply chain, swings in consumption, and other areas of uncertainty” in 2023.
It also identifies that in Europe “production will come under pressure for all species, on disease risks, market and regulatory-driven changes, and reduced exports”.
Global production of animal protein is forecast to rise again in 2023 but growth will slow.
Beef demand under pressure
Specifically in Europe the RaboResearch report forecasts that beef consumption will come under pressure because of “tightening” consumer budgets.
“Rabobank expects that beef production in the EU27 will decline at a slowing rate in 2023, by about 0.5% year on year,” the report states.
“Recent herd data suggests that by June 2022, the cow herd in the top ten beef producer countries, representing about 85% of the EU27’s total herd, declined by 2.1% year on year”.
The latest RaboResearch report also shows that while the decline in beef production may slow in Europe “structural issues” will influence herd dynamics in the long run.
It also details that key factors such as “the aging producer base, low profitability, and environmental issues” will remain dominant in 2023.
According to RaboResearch producer margins improved slightly in 2022 but Rabobank has warned it is unlikely this trend will continue.
The research report highlights that ” increasing investments that will be needed to address environmental issues in beef production” including reducing greenhouse gas emissions and decreasing nitrogen emissions in the European Union.
Rabobank said this will “likely impact cost-price and profitability of beef producers”.