Rabobank predicts demand for meats will continue to increase
until 2018, but after that the industry will face some challenges.
The report by executive director Will Sawyer says meat consumption
by Americans increased by five percent in 2015 alone — faster than any other
year over the past four decades.
Last year, the average American ate 193 pounds of a
combination of red meat and poultry,
Sawyer predicts that protein production will increase by 2.5
percent per year through to 2018 with beef being the largest contributor. The
current increase rate has been three per cent.
“By the end of this expansion cycle in late 2018, we expect
a more challenging profit environment across the U.S. meat industry, providing
strategic opportunities for those producers with the capital and foresight to
take advantage of them, “ Sawyer’s report says.
He also expects further industry consolidation.
“Any producer considering a possible sale or divestiture
should move quickly, as the outlook for margins and valuation isn’t moving in
their favor,” he wrote about the poultry processing industry.
“And it will likely be more than a few years before industry
conditions return to current levels,” he predicts.
His outlook is good news for consumers who will have more
meats available and at lower prices, especially for beef and pork.
