Meeting Worldwide Demand for Food and Feed
May 01, 1997
by Teresa Acklin
David Bossman, president of the American Feed Industry Association, spoke at a GEAPS educational session on the factors influencing the future of global food and feed demand. Excerpts of his comments follow.
The opportunities for agricultural production, particularly animal agriculture and animal nutrition, are taking on new proportions around the world. The challenge of feeding a growing, increasingly prosperous and aging population is going to offer astonishing opportunities for each agricultural segment, particularly animal agriculture.
Meeting this challenge to feed a hungry world will mean understanding demand and changing dynamics. Meeting the new market will require:
the use of all technologies available;
adapting to different cultures;
developing relationships with consumers;
providing and controlling a quality product;
the willingness to use economic leverage and available infrastructures; and
being involved in the government process to influence public policy.
Taking advantage of this new worldwide opportunity requires a look at population growth, its concentration and demographics by region of the world. It also requires an assessment of the economics of the population as well as the change in diets.Demographics
The population of the world at the end of 1996 was just under 6 billion people. In 35 years, that population will grow to approximately 9 billion people, or a 50% increase.
This population growth is not as large as the overpopulation prognosticators had predicted it to be; Lester Brown of World Watch has estimated world population at 12 billion to 15 billion. The difference is very significant because a slower rate of population growth increases the affluence of the population, which further reduces the birth rate and corresponding population growth.
Let me explain. Whenever there is an increase in economic growth in developing countries, there is always a reduction in birth rate. Economic growth in the developing countries is approximately 3.5% a year, with some countries over 9%, compared with 2.2% in the United States.
The birth rate has dropped in developing countries from 6.5 births per thousand women to 3.2. Again, as point of reference, the United States' birth rate is 1.8. This reduction in birth rate, particularly in Asian and Latin American countries, is a clear signal of economic growth.
We also know that as the economies of developing countries improve, the first use of the new-found wealth is to improve quality of life, which always includes more meat, milk and eggs in the diet. For each 1% of economic growth, there is a 2% increase in meat, milk and egg consumption.
In the United States, we eat an average of 70 grams of animal protein product per day. In Japan, they eat approximately 55 grams of animal protein per day.
In other parts of Asia, the animal protein consumption currently is 17 grams per day. As improved economic conditions allow, they will increase that animal protein consumption from the 17 grams per day to a level near the 50 grams per day, such as the Japanese.
When you couple that increase of consumption per day with the increasing population from just under 6 billion to 9 billion in the next 30 years, it means that the production of meat, milk and eggs in the next 30 years must increase by 300% in order for us to satisfy the demand.Food Safety and Environment
This worldwide consumer demand will be regionally influenced by changes in age and health concerns, particularly in the industrialized countries of North America and Europe. Changes will relate to culture and education, and also, very importantly, to new products emerging from packaging, marketing, processing and consumer fads. The new products will stem from new technologies and the grocery buyers' demand for food quality and food safety concerns.
The quality of the food supply and consumer confidence, which is a major factor in buying decisions, will continue to be a major influencing factor in what and how we eat.
In most of the world, the food supply provided through traditional distribution channels is very, very good. However, the breaches of consumer confidence in isolated instances will continue to cause major shifts in what and how people eat.
As the need for increased food production puts additional demands on production and processing technologies, consumers will become more and more concerned about quality. The various production technologies for pest control, rodent control, micro toxins and molds will give rise to additional public scrutiny of these technologies and methods of production.
Various environmentalists will probably continue their unwise strategies of asking for old technology instead of new technology in an effort to save wildlife, when, in reality, the new technologies' high production and precision farming is the only way we will be able to save the wildlife for future generations to enjoy. At some point, it will become abundantly clear that neither famine, starvation nor unwelcome or unwanted birth control mechanisms will save the wildlife or the environment.
The poor and the hungry will cut down a tree or kill endangered species if it will feed their families. The only way we will be able to feed the affluent, hungry world will be with new production and processing technologies, not to turn back the clock to utilize old methods.Yields, Distribution and Markets
The availability of the food supply for increasing demand will be based on many factors: area planted, new technologies both in animal nutrition and genetics and the yield per hectare of grain. All will influence food availability.
We know that the land available to plant is very limited and, with environmentalists keeping their demands at a high level, the number of new hectares available for production will be very limited. The per-hectare yield of crops and the kilograms per gain of livestock and poultry will be critical in satisfying this new demand. The only way the additional yields will be realized is through new technologies of fertilizers, pesticides and chemicals, animal nutrition and genetics.
In certain parts of the world, water availability is a critical factor. When agriculture competes with urban populations for the water supply, agriculture usually loses.
Available storage and transportation also play a major role in meeting this new food demand. In many parts of the world, the infrastructures are not adequate to service increased areas and yields.
The roads, railroads and waterways must be built to allow for the increased demand. The importing and exporting of foodstuffs must have a transportation system available for efficient distribution.
It is a major concern who will build the necessary infrastructure. Most of the developing countries do not have the economic strength to develop the necessary infrastructure, so it must come from the private sector.
Just as the agricultural, mining and manufacturing sectors, along with the government, built the road, rail and waterway infrastructures in the U.S., they must also do it in other parts of the world.
Pricing and pricing mechanisms are a major factor in meeting the worldwide demand for food. Allowing for fair and equitable pricing will allow for profits to be made and further growth to be realized.
Free market pricing for worldwide foodstuffs is the only way the demand can be filled. The open market can accommodate the differences in quality, the cost of production in both labor and input costs and the cost of transportation.
Free pricing mechanisms must be allowed to operate without government interference or undue influence. Each region of the world must be allowed to grow the food they are most efficient at producing, utilizing local laborers and local natural resources.
Protecting inefficiencies will only slow the growth of the food supply. Any subsidizing of local production for social reasons must be done without distorting the price of food; if small, inefficient producers are expected to stay on their farms, governments should give them subsidies for social reasons, not payments which distort the price of food or with tariffs from imports to artificially inflate the local price of food.
Free market pricing mechanisms will allow for fair competition between countries and regions. It will also take into account the local basis and provide for future contracting and hedging. Extending free market pricing mechanisms to all regions of the world will allow new technologies to emerge and the creation of wealth necessary to fulfill the demand.