Rabobank: African swine fever to result in another year of animal protein deficit

African swine fever may spread in Asia, allowing opportunities for livestock exporters to fill the animal protein gap, according to Rabobank.

African swine fever in China has given an opportunity for livestock exporters to capitalise on a shortage of animal protein.

THE African swine fever crisis gripping Asia at the moment offers a limited opportunity for Australian livestock producers to get their snouts in the trough.

But their ability to capitalise on a global shortage in animal protein would be difficult, given relatively low livestock numbers.

Rabobank’s global animal protein outlook for 2020 has forecast another year of global decline in animal protein, although not at the same level as this year, when African swine fever devastated the Chinese pork market.

The report said ASF was likely to spread to other countries in 2020 but would not result in the same level of impact as felt in China and Vietnam.

Rabobank said that, while animal protein production growth was expected in most regions of the world, the impact of ASF on Chinese pork production would “exceed the growth in all other regions combined”.

Rabobank senior animal proteins analyst Angus Gidley-Baird said poultry and aquaculture would lead global production growth in 2020, while beef remained stable and wild-catch seafood was forecast to decline.

But all this was overshadowed by the decline in pork production.

“The drop in pork production is driving a hole in the global protein space that simply cannot be met,” Mr Gidley-Baird said.

“And this is despite increases in production particularly out of North America and Brazil.”

Rabobank said poultry imports in China rose by 51 per cent and beef by 54 per cent in the first nine months of this year to compensate for the loss in pork production.

The bank said Chinese poultry production grew rapidly in 2019 and was expect to increase by more than 10 per cent in 2020, but beef production in China was only likely to rise by about 2-3 per cent next year.

“Due to the higher production costs in China, compared with other countries, China will need to increase imports to meet the strong demand,” the report said.

Rabobank said Australia stood to benefit from the limited global protein supplies.

But Mr Gidley-Baird said while, global demand would keep local beef and sheep meat prices strong, any further upside was dependent on seasonal conditions.

“There is considerable upside potential for prices, given livestock inventories for both sheep and cattle are at their lowest levels in over 20 years,” he said.

“And it is this low stock availability that will see the market remain highly sensitive to substantial rain events.”