PORK is back on the global menu and expected to lead a surge in animal protein production in 2021, according to agribusiness specialists at Rabobank.
But local pork production growth will be limited, with Australia's animal protein producers primarily concentrating on rebuilding cattle and sheep numbers in the year ahead, Rabobank has forecast.
Its Global Animal Protein Outlook 2021 report released this week predicts China's initial recovery from African swine fever (ASF) will emerge as the biggest driver of growth in the global animal protein sector - while also representing the greatest risk for global trade.
Rabobank senior animal protein analyst Angus Gidley-Baird said after a challenging 2020, production growth was expected across most key animal protein markets and most species in 2021, but pork would be the driver.
"Pork production is expected to grow faster than its protein counterparts in 2021, driven by the ASF recovery in China and Vietnam, while poultry and aquaculture are also expected to grow based on post-COVID-19 improvements to foodservice," Mr Gidley-Baird said.
He said China's pig herd started its recovery last year, after nearly halving in size the previous year due to ASF and he predicted it would continue to grow strongly next year.
While ASF still threatens many of China's smaller pork producers, who make up about half of the production, Rabobank expects the ongoing recovery could see the 2021 herd inventory reach above 80 per cent of pre-ASF levels, Mr Gidley-Baird said.
ASF still remains active across the globe, he said, with Germany continuing to manage an outbreak detected in September and further herd losses likely in the Philippines and also Vietnam.
But despite sporadic outbreaks in 2020, pork production is expected to increase ahead of other animal protein sources in 2021.
The outlook report said beef should return to modest growth, led by increased production in North America and Brazil, while wild-catch seafood is likely go against the growth trend, with a small decline expected due to climatic conditions and reduced quotas.
In Australia, the smallest cattle herd in more than 25 years will cause a slight dip in slaughter numbers in 2021 compared to 2020, it said.
But Mr Gidley-Baird said improved pastoral conditions should increase average carcase weights for a small lift in both production and exports.
Ongoing competition from producers, feedlotters and processors will ensure cattle prices remain strong, although prices are likely to ease as numbers build.
"Continued high female slaughter rates in 2020 and high livestock prices suggests a focus by producers on trading cattle rather than retaining them for breeding, so we expect herd rebuilding activities to extend into 2021," Mr Gidley-Baird said.
Australian lamb slaughter is expected to increase in 2021, despite the country's smallest sheep flock in more than 75 years, the report predicts.
"Better breeding conditions and an increased focus on lamb production will drive increased lamb slaughter and, while carcase weights are expected to remain steady, production and, in turn, exports should grow," Mr Gidley-Baird said.
Domestic demand for sheep and flock rebuilding is forecast in the outlook report to remain firm, with export demand key to lamb pricing.
Despite the forecast recovery in China's domestic pork production, Chinese imports of pork, poultry, beef and seafood will continue to dominate global trade, the report predicts.
The report suggests any "irregular swings" from China in relation to international trade may have significant consequences for producers and markets.
"Changes in China's import policies, shifts in China's commitment under the phase one trade deal with the United States or moves to avoid human or animal health risks could all present trade issues in the coming year," Mr Gidley-Baird said.
He said recovery from COVID-19 would continue to impact on the global animal protein market in 2021, with issues surrounding foodservice recovery, labour availability costs, supply chain transformations and food safety creating both opportunity and risk.
In the beef sector, Mr Gidley-Baird said labour availability and cost would remain the most pressing challenge for global beef processing and production.
"Given the higher cost and reduced opportunities in foodservice, margin squeeze will also be a challenge, however foodservice recovery will help lift these margins, particularly for higher-value beef cuts served in restaurants," he said.
Reduced global poultry demand due to the economic downturn in some importing countries has impacted trade and created the need for more focus on domestic consumers, but Mr Gidley-Baird said foodservice recovery would help balance out supply and demand.
"Global seafood trade has been greatly affected by COVID-19, and the market risk will be ongoing pending foodservice recovery and improved demand - sectors such as shrimp are yet to recover from trade disruptions," he said.
Mr Gidley-Baird said post COVID-19 opportunities would also emerge, largely on the back of foodservice recovery and the rise of e-commerce direct-to-consumer trends.
"Tech innovations - such as methane-reducing additives which improve feed efficiency, or traceability to mitigate animal disease risk and provide supply chain transparency - exemplified an increasing focus on sustainability and productivity in animal protein," he said.
Mr Gidley-Baird said this technology would enable and accelerate commercial adoption into 2021, helping drive environmental, social and economic sustainability.
He said the increased role markets and regulators would play in improving sustainability of the animal protein supply chain would also become clearer in 2021, with the number of animal protein, food retail and foodservice companies making commitments to lessen their environmental footprint likely to grow.
