The People’s Republic of China (PRC) will continue to dominate the world meat production and trade over the coming years, although its animal protein industry is entering a period of transition, according to Rabobank’s China Animal Protein Outlook to 2020 report. Demand growth is slowing, and the industry is changing in response. Growth in production and consumption offers opportunities for China’s producers and for global traders.
As the PRC’s economy slows, animal protein demand growth is following suit, but additional demand each year is still big in absolute terms. According to Chenjun Pan, Rabobank’s senior analyst for the animal protein market: “On the supply side, pork production will be reshaped, while poultry production faces uncertainty, and beef production will likely drop. As a consequence, meat imports are expected to increase steadily, further cementing China’s role as the world’s most significant meat importer.”
Key highlights detailed in the report follow.
Pork
In the coming years, additional production will mainly occur in China’s north and northeast, while in the south – where rivers and lakes are located – further development of pork production will be restricted.
Poultry
The breeding stock for white-feathered birds depends on imports, making the whole supply chain vulnerable to trading changes. It is anticipated that white bird production will fall in 2017, due to the low level of breeding herd and trade restrictions.
Beef
In 2017, beef production is expected to drop. Thereafter, the industry will grow at 1% to 2% each year, until 2020. However, beef demand is likely to outpace domestic production. This will lead to growing imports in the coming years. By 2020, imports are expected to make up more than 20% of the total supply.
No. 1 Meat Importer
Meat imports are expected to increase steadily in the coming years – across beef, pork and poultry sectors – reinforcing China’s position as the world’s most important meat buyer. As total meat exports to mainland China reach over 6 million tons in 2020, the PRC will become – if it is not already – the main focus for meat exporters worldwide.
Two important questions arise from this increasing focus. The first is how China will look to influence global meat trade, given its dominant role. The second is how animal protein companies will look to establish a sustainable supply chain to meet the PRC’s evolving market needs.
About Rabobank
Rabobank Group is a global financial services leader providing wholesale and retail banking, leasing, real estate services, and renewable energy project financing. Founded over a century ago in the Netherlands, it is one of the largest banks in the world, with approximately $750 billion in assets and operations in more than 40 countries. In North America, Rabobank is a premier bank to the food, beverage and agribusiness industry. Its Food & Agribusiness Research and Advisory team is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all sectors of agriculture.
