Home > Slowing meat production signals good price news for beef and sheep

Slowing meat production signals good price news for beef and sheep

Editorial
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Australia’s sheepmeat and beef producers are set to enjoy strong prices into 2019, supported by a growing global appetite for meat amid limited supply availability, Rabobank’s Global Animal Protein Outlook 2019 indicates.

However, the productive capacity of Australia’s beef herd and sheep flock will be limited by the heavy culling of female cattle and sheep seen in 2018, with any upside dependent on improved seasonal conditions in the year ahead.

Rabobank’s annual outlook for the animal proteins sector, titled Growth Slows Down, As Doubt Gears Up, forecasts a slowing in the pace of growth for meat production in most regions throughout the world next year.

Uncertainty is created by trade tensions, high feed prices and African swine fever 

Global animal protein production, primarily beef, pork and poultry, is expected to expand by more than one million tonnes in 2019 – well below the five-year average growth rate – to some 500 million tonnes.

Production growth will slow across nearly all key regions, with China predicted to see a substantial production decline, driven by the impacts of African swine fever on its pork sector, the report said.

Brazil’s livestock production, however, is forecast to continue its strong growth trajectory, while the production outlook for North America is also relatively strong,

For Australia – where sheepmeat and beef production will decline, alongside New Zealand – the overall restrained global animal production outlook will provide some upside on the price front.

Good global prices will continue to support Australian prices for finished lambs and cattle in 2019, the report explains.

Rabobank senior animal proteins analyst Angus Gidley-Baird said strong global demand for sheepmeat and limited supply availability will support strong prices through 2019, with New Zealand – the world’s other major supplier of sheepmeat – set to have its lowest lamb kill on record in 2019.

“While further upside beyond record 2018 sheepmeat prices will be limited, prices will remain firm, given strong demand in key global markets such as the Middle East, China and the US,” he said.

Lamb production in Australia will remain restricted in 2019, impacted by higher sheep sales seen in 2018 due to dry weather conditions, said Gidley-Baird.

For Australia’s beef sector, the cattle inventory will remain very low following heavy de-stocking seen between 2013 and 2016, and then again in 2018, due to dry conditions that limited the availability of feed.

Cattle numbers will remain steady at the current low numbers until conditions improve, said Gidley-Baird.

“While limited supplies support cattle prices for producers, supply-chain efficiencies will be tested, with lower volumes available for feedlots and processing,” he said.

“Without substantial rain, 2019 will test many producers, given already-limited and expensive fodder supplies.”

Rabobank expects Australian beef production volumes to fall with lower slaughter numbers and, consequently, export volumes to decline slightly in 2019.

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