1 global feed demand and supply: prospects and implications zhangyue zhou asian agribusiness...
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Global Feed Demand and Supply: Prospects and
Implications
Zhangyue Zhou
Asian Agribusiness Research CentreThe University of Sydney
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Worldwide animal husbandry development
Rapid increase in meat production worldwide
0
50
100
150
200
250
300
350
400
World Developing Countries
mil
lio
n t
on
ne
1979-81 1997-99 2015 2030
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• The term, “The Livestock Revolution” - IFPRI 2020 Vision Discussion Paper (Livestock to 2020: The Next Food Revolution).
• A structural phenomenon that is here to stay.
• Challenges, especially in developing countries:– Environmental protection– Natural resource protection– Prevention and control of animal diseases– Prevention of disease cross-infection between
animals and human beings– Supply of additional feed
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Outline
1.Feed versus food: emerging trends in demand
2.Feed demand and supply: global perspectives
3.Matching the demand with supply4.Meeting the increasing demand for feed:
challenges for future farming5.Implications
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• Insight into China’s feedgrain markets
• Valuable for government grain policies
• Valuable reference for further research
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1. Feed versus food: emerging trends in demand • Worldwide increase in the consumption
of animal products • Marked increase in developing countries • Between the mid 1960s and late 1990s,
per capita consumption of meat in developing countries rose by 150% and that of milk and dairy products by 60%
• Trend to continue
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Globally, per capita animal product consumption will continue to rise.
0
50
100
150
200
250
Meat Milk and DairyProducts
Eggs
Kilo
gra
m
1997/99 Developing 2030 Developing
1997/99 Developed 2030 Developed
Source: FAO report.
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China factor
1994/96 1997/99 % increaseWorld 34.6 36.4 5.2% excl. China 34.1 34.2 0.3%Developing countries 22.7 25.5 12.3% excl. China 17.5 18.2 4.0%
1987/89 1997/99 % increaseWorld 166 218 31.3% excl. China 142 162 14.1%Developing countries 66 116 75.8% excl. China 41 60 46.3%
Total meat
production (mt)
Per capita meat
consump-tion (kg)
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China’s urban income and consumption
China’s rural income and consumption
0
2000
4000
6000
8000
1981 1985 1990 1995 1996 1997 1998 1999 2000 2001
Per Capita Income (¥)
020406080
100120140160
1981 1985 1990 1995 1996 1997 1998 1999 2000 2001
0
5
10
15
20
25
30
Consumption of Cereals (kg) Consumption of Meat (kg)
0
750
1500
2250
3000
1981 1985 1990 1995 1996 1997 1998 1999 2000 2001
Per Capita Income (¥)
165
170
175
180
185
190
195
200
1981 1985 1990 1995 1996 1997 1998 1999 2000 2001
0
5
10
15
20
Consumption of Cereals (kg) Consumption of Meat (kg)
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An increasing share of cereals is used for feed purposes, especially in developing countries.
0
10
20
30
40
50
60
70
Developing Industrial Transition
%
1997/99 2015 2030
Source: FAO report.
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2. Feed demand and supply: global perspectives
Global feedgrain demand will further increase.
0
200
400
600
800
1000
1200
1400
World Developing Industrial Transition
millio
n to
nn
e
1997/99 2015 2030
Source: FAO report.
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At the global level, cereal demand will be met by the supply with a small surplus, implying that there will be sufficient cereals for feed use.
Production Net Trade SSRFood Feed All Uses (m t) (m t) (%)
1997/99 1003 657 1864 1889 9 1012015 1227 911 2380 2387 8 1002030 1406 1148 2830 2838 8 100
Total Demand (m t)
SSR: self-sufficiency rate = production/demand. Source: FAO report.
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Developing countries will experience a shortage of cereal supply.
-300
-200
-100
0
100
200
300
mill
ion
tonn
es
1997/99 -103 111 1
2015 -190 187 10
2030 -265 247 25
Developing Industrial Transition
Source: FAO report.
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In developing countries, feed use of cereals will more than double.
SSR: self-sufficiency rate = production/demand. Source: FAO report.
Production Net Trade SSRFood Feed All Uses (m t) (m t) (%)
1997/99 790 222 1129 1026 -103 912015 1007 397 1544 1354 -190 882030 1185 573 1917 1652 -265 86
Total Demand (m t)
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China’s feedgrain demand and import requirements are likely much smaller than previously projected.
Source: GRDC report.
+/-% Total +/-% TotalBase 159 159 0.0Scenario 1 1.5 161 1.5 161 0.0Scenario 2 -2.9 154 -2.9 154 0.0Scenario 3 0.4 160 2.0 162 2.6Scenario 4 0.9 160 2.5 163 2.6Scenario 5 -2.1 156 -2.1 156 0.0Scenario 6 27.9 203 30.3 207 3.7Scenario 7 25.2 199 27.3 202 3.2
Deficit (D-S)
Supply Demand
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China’s feedgrain demand and import requirements: GRDC project and previous studies
Previous Studies (m t)
GRDC Report (m t)
Feedgrain supply
280 203
Feedgrain demand
310 (345) 210
Import requirements
30 < 10
Source: GRDC report.
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3. Matching the demand with supply• Developing countries will have
major cereal feed shortages. • They will have to source extra feed
cereals from the world market.
18Source: FAO report.
Coarse grain shortages in developing countries can be met by the surplus available from industrial and
transition countries.
-150
-100
-50
0
50
100
150
mill
ion
ton
ne
s
1997/99 -43.2 43.4 2.1
2015 -89 83 8
2030 -128 115 15
Developing Industrial Transition
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Countries in sub-Saharan Africa are unlikely to import feed cereals to any
great extent.
Within developing countries, who will be the major importers?
Per Capita Cereal Demand Net SSRFood All Uses % of Food Trade(kg) (kg) Use (m t) (%)
1964/66 115 143 80 -2 971974/76 115 143 80 -4 941984/86 118 142 83 -10 851997/99 123 150 82 -14 822015 131 158 83 -25 822030 141 170 83 -40 81
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Countries in South Asia are unlikely to import much cereal feed either.
Per Capita Cereal Demand Net SSRFood All Uses % of Food Trade(kg) (kg) Use (m t) (%)
1964/66 146 162 90 -10 861974/76 143 162 88 -10 981984/86 156 175 89 -3 1001997/99 163 182 90 -3 1022015 177 200 89 -12 972030 183 211 87 -22 95
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Countries in Latin America and the Caribbean regions together will not be the major feed
importers either. Per Capita Cereal Demand Net SSR
Food All Uses % of Food Trade(kg) (kg) Use (m t) (%)
1964/66 116 207 56 5 1091974/76 123 239 51 -2 1011984/86 132 267 49 -3 961997/99 132 285 46 -14 882015 136 326 42 -16 922030 139 358 39 -13 95
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Countries in Near East/North Africa are likely to be the major importers of cereal feed.
Per Capita Cereal Demand Net SSRFood All Uses % of Food Trade(kg) (kg) Use (m t) (%)
1964/66 172 292 59 -5 861974/76 189 309 61 -13 851984/86 204 365 56 -38 651997/99 209 352 59 -49 632015 206 368 56 -85 562030 201 382 53 -116 54
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Developing countries in East Asia are also likely to be the major importers of cereal feed.
Per Capita Cereal Demand Net SSRFood All Uses % of Food Trade(kg) (kg) Use (m t) (%)
1964/66 146 181 81 -5 981974/76 162 211 77 -10 971984/86 201 263 76 -12 971997/99 199 290 69 -23 952015 190 317 60 -53 922030 183 342 54 -73 91
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East Asia and Near East/North Africa will also be two major meat-importing regions.
-6000
-4000
-2000
0
2000
4000
thou
sand
ton
nes
1997/99 -92 -1246 658 170 -732
2015 -280 -2360 1770 -80 -2950
2030 -740 -3520 2770 -410 -4000
Sub-Saharan Africa
Near East/North Africa
Latin America and the
CaribbeanSouth Asia East Asia
Source: FAO report.
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Major corn importers (2003)
16,0
00
9,50
0
6,50
0
5,00
0
4,50
0
4,00
0
2,50
0
2,00
0
2,00
0
1,70
0
1,50
0
1,50
0
1,40
0
1,10
0
1,10
0
1,00
0
1,00
0
13,1
85
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000Ja
pan
Kor
ea, R
epub
lic o
f
Mex
ico
Egy
pt
Tai
wan
Eur
opea
n U
nion
Mal
aysi
a
Can
ada
Col
ombi
a
Iran
Alg
eria
Sau
di A
rabi
a
Indo
nesi
a
Dom
inic
an R
epub
lic
Syr
ia
Chi
le
Mor
occo
Oth
ers
tho
usa
nd
to
nn
e
World total imports: 76470 thousand tonnes
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Major corn exports (2003)
Ukraine 2%
Others3%
Brazil 7%
South Africa, Republic of
1%
Argentina 15%
United States 61%
China, Peoples Republic of
11%
World total exports:
76470 thousand tonnes
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• When China turns from being the current net feedgrain exporter to a net importer, corn will be the most likely imported item.
• When the need arises for China to import feedgrains, where China will source these imports will be largely governed by market signals given that China is now a member of the WTO.
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4. Meeting the increasing demand for feed: challenges for future farming • Increase in animal product
consumption will pose significant challenges for future farming as it has to produce enough feed to raise additional animals.
• Where will the increased feed come from?
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Broad Classification of Feed Sources
Category Examples1. Pasture Native, natural and improved2. Cereal Grains Corn, barley, oats, sorghum, feed wheat, feed
rice, triticale3. Fodder Crops Oats, millet, feed sorghum, winter wheat that
can be converted into silage, haylage, hay4. Concentrate Meals Meat meals, soybean meals5. Food Processing Wastes Yeast by-products, citrus pulp, vegetable
wastes, bran and pollard6. Other Forage trees, grasses, household food scraps
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• Farmers in developing countries will face greater challenges in providing additional feed whilst also protecting their already strained agricultural environment.
• Developed countries should provide generous assistance to developing countries to develop their feed techniques and improve their animal raising practices.
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5. The Livestock Revolution: opportunities for farmers?
• The rapid development of the livestock industry will benefit most farmers in both developed and developing countries.
• Benefit to farmers in developing countries will vary with farm size.
• Farmers in China?
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Questions remaining • Sufficient feed supply in China?• Imports needed? • What to import: feed or animal
product?• How much to import?• Should China import feed or animal
products?• How can China capitalise on the so-
called “Livestock Revolution”?