As part of an effort to predict the future of the food supply and demand in 76 low- and middle-income countries that currently have large populations deemed food insecure, the Economic Research Service (ERS) of the U.S. Department of Agriculture has devised a model pointing to countries and areas that are likely to enjoy fairly large increases in consumption of grain-based foods. The new study, titled “International Food Security Assessment, 2016-2026,” reflects what the ERS says is a different approach to forecasting food demand in 2026. The new data approach stems from analyzing the way expected declines in food prices over the next decade combine with likely income and population gains to estimate food consumption. This model points to a much more optimistic pattern in 2026 than shown by previous analysis relying on supply forecasts.
The new model projects food consumption in terms of demand measured for each of 76 low- and middle-income countries. The food shortfall in each is measured by the grain-equivalence of a shortfall from a nutritional target of 2,100 calories per day. It is that shortfall, which is estimated in terms of grain that may be converted into grain-based foods like flour. Each country’s food security is measured for 2016 and for 2026, showing the gap between projected consumption (in this case food demand) and the nutritional target. The 2,100 calories considered necessary to sustain life at a moderate level of activity is the average rate in developed nations.
The study describes its findings as “highly optimistic,” based solely on strong income growth and slightly lower food prices. Such a description stems from the numbers alone, especially what is called Implied Additional Supply Required (IASR). For all 76 countries in the new study, the IASR in 2016 is estimated at 154 million tonnes in grain equivalent, compared with the supply model estimate of 150 million and actual imports of 145 million. Those imports would more than double to keep pace with the IASR of 329 million tonnes projected for 2026. The study says production will barely keep up with population growth and that demand expansion due to lower food prices and higher incomes will have to be met from outside sources.
Regional expectations based on the demand model are revealing. Asia accounts for a large part of the increase; its demand model IASR in 2016 of 59 million tonnes is projected to grow to 165 million in 2026. Sub-Saharan Africa faces a shortfall of 34 million this year that will become 72 million a decade ahead. Latin American and Caribbean countries have a current IASR of 19 million tonnes, which is projected to grow to 28 million in 10 years. North Africa is assigned an IASR in 2016 of 42 million tonnes, which is forecast to grow to 67 million in 2026.
It should be no surprise that the ERS stresses that the difference between projected food production and demand “must not be interpreted as projected imports.” This is explained by noting that demand forecasts are not linked to food supply projections to create a closed system. “This means,” the ERS wisely says, “there is no equilibrium price that could induce supply to increase or demand to decrease.” It adds that this shortcoming may be addressed in future models.
Keeping that warning in mind, it is still helpful to see how the model indicates demand changes in the next 10 years. Its elements, especially the income outlook, bring current bright forecasts of global income trends into its role as a force in consumption. The earlier supply-oriented model does not foresee as favorable an outcome for the nations involved or for industries like milling that strive to be in the forefront of solving the global quandary forcing millions to subsist on inadequate diets. Three ERS officials are credited for the new model — Stacey Rosen, Karen Thome and Birgit Meade — and they deserve the grain industry’s thanks for this important work.