Evolution of animal productionin emerging markets:

China, Russia, India, Brazil, AfricaConference on mega trends in livestock production: The state of animal

agriculture 2025–2050

Florham Park, USA, 11–13 March 2014

Jimmy Smith Director General ILRI

Animal agriculture to 2050: TRENDS

GLOBAL TRENDS:Livestock demand and production are increasing rapidly in developing countries

• Unprecedented rising demand for livestock commodities will continue over the coming 5 decades

• Where and how most livestock commodities are produced, sold and consumed is changing significantly

Animal agriculture to 2050: TRAJECTORIES

TRAJECTORIES OF CHANGE:Some of the greatest changes will occur in the smallholder sector• The big changes in livestock

systems are occurring among smallholders, who differ greatly according to region, system, poverty levels, etc.

• Small-scale mixed crop-livestock farmers in developing countries offer big opportunities for preventing disease outbreaks, closing yield gaps and reducing greenhouse gases

Animal agriculture to 2050:SCENARIOS

FUTURE SCENARIOS:Big opportunities liein developing countries

• Vaccines and other technological advanceslikely to be of broad usecan be game changers

• More judicious targeting of different livestock markets and institutions could vastly increase returns on invest-ments by the private and public sectors

Animal agriculture: Past, current, future

Future trends:• Demand• Production• Trade

Trajectories of change:• Diverse opportunities

Plausible future scenarios:• Global assessments (e.g. MEA)• Livestock-sector responses

From key(1) assumptions, (2) drivers (rising human population,per capita GDP, urbanization and (3) past trends:

Trends

% change in global demand for livestock products: 2000–2030

milk beef mutton pork poultry meat

eggs0

20

40

60

80

100

120

140

160

180

FAO 2011

%

Gains in meat consumption in developing countries are outpacing those of developed countries

1980 1990 2002 2015 20300

50

100

150

200

250

300

developingdeveloped

Mill

ion

met

ric t

onne

s

FAO 2006

% change in consumption of animal products:2000–2030

Milk Beef Mutton Pork Poultry meat

Eggs0

50

100

150

200

250

300

ChinaRussiaBrazilIndiaSSAHigh income

843%

%

FAO 2011

Consumption of livestock productsto 2050

• Globally:An overall increase in per capita daily consumptionof livestock products of 37% compared to 2000

• Commodities differ:– A 2% decrease in global per capita meat consumption

– A 61% increase in global per capita milk consumption

• Regions differ:– In 2000, Africa and Middle East consumed (in total calorie

consumption) 60% fewer livestock foods than the EC

– In 2050, this will be reversed: highest livestock consumption will be in Africa & Middle East, lowest in the EC

Herrero et al. 2014

1bn tonnes morecereals to 2050

1bn tonnesdairy each year

460m tonnesmeat each year

By 2050 we’ll need huge amountsof cereals, dairy and meat . . .

Where and how most livestock commoditiesare being produced, sold and consumed

is changing significantly

Projections of livestock production increases:2000–2050

• In half a century, total livestock commodityproduction is projectedto increase by 92%:

+106% for monogastricmeat (pig and poultry)and poultry eggs

+88% for ruminant meat(cow, sheep, goat, camel,water buffalo)

+85% for milk

• With big regionaldifferences

Herrero et al. 2014

% change in production of animal products:2000–2030

Milk Beef Mutton Pork Poultry meat

Eggs0

50

100

150

200

250

300

ChinaRussiaBrazilIndiaSSAHigh income

%

FAO 2011

Production estimate in 2030:000s metric tonnes

Milk Beef Mutton Pork Poultry meat

Eggs0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

ChinaRussiaBrazilIndiaSSAHigh income

FAO 2011

Production estimate in 2030:000s metric tonnes

Milk Beef Mutton Pork Poultry meat

Eggs0

10000

20000

30000

40000

50000

60000

ChinaRussiaBrazilIndiaSSAHigh income

178,407

167,48862,758

FAO 2011

% increase in production of livestock products:2000–2050

Raw milk Monogastric meat & eggs

Ruminant meat0

50

100

150

200

250

300

350

400

EuropeLatin AmericaAfrica/Middle East

%

Herrero et al. 2014

Valuable livestock productsare moving around the globe

4 out of 5 of the highest valueglobal commodities are livestock

FAOSTAT 2013

Import and export of meat (000s metric tonnes)

2011 2020 2011 2020 2011 2020-3000

-2000

-1000

0

1000

2000

3000

4000

5000

6000

other AfricaIndiaBrazilRussiaChina

Expo

rtIm

port

Beef Pork PoultryFAPRI 2012

Global livestock product exports:2013–2022

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

0

1000

2000

3000

4000

OECD estimates of beef/veal export

developed countries BRICSSSA

000s

ton

nes

BRICS dominate

World meat exports increase by 19% to 2022

Poultry and bovinemeat account for 80%of the trade

Estimated dairy trade increases of 1.6−2.1%per year (mainly fromUS, EU, New Zealand, Australia & Argentina)

OECD-FAO 2013

FAO 2013. World Livestock 2013 – Changing disease landscapes

Poultry meat exports

From Brazil and the US:

1987−1989

1997−1999

2007−2009

Trajectories

Monogastric production systems

2000 2050 2000 2050 2000 20500%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

smallholderindustrial

Europe Latin America Africa/Middle EastHerrero et al. 2014

Ruminant production systems

• Mixed systems are an important sourceof ruminant meat in 2000 and 2050– Europe: 42% mixed temperate– Latin America: 48% mixed humid– Africa/Middle East: 38% mixed arid

• For milk:– Over 50% of milk comes from mixed

systems, regardless of the region– Big increases in milk production

by 2050 continue to be in mixed systems, especially in Africa and the Middle East

Smallholder mixed crop-livestock keepersare competitive

East African dairy• 1 million Kenyan smallholders keep Africa’s largest dairy herd• Ugandans are the world’s lowest-cost milk producers• Small- and large-scale Kenyan poultry and dairy producers

have same levels of efficiency and profits

Vietnam pig industry• 95% of production is by producers with less than 100 animals • Pig producers with 1-2 sows have lower unit costs

than those with more than 4 sows• Industrial pig production could grow to meet

no more than 12% of national supply in the next 10 years • Smallholders will continue to provide most of the pork

IFCN, Omiti et al. 2004, ILRI 2012

Trajectories of growth

•‘Strong growth’– Intensifying and increasingly market

oriented often transforming smallholder systems

•‘Fragile growth’– Where remoteness, marginal land

resources or agro climatic vulnerability restrict intensification

• ‘High growth with externalities’ (industrial)– Intensified livestock systems with

diverse challenges including the environment and human health

Trajectory

‘Strong growth’

Sector

− Ruminant meat and milk, esp. in SSA, India− Pork in some regions

Issues

− Market access and food safety− Endemic disease impacts− Zoonotic outbreaks

Opportunities

− New opportunities for novel approaches from the private animal health sector

‘Fragile growth’ − Some smallholder and pastoral systems; little part in the production response

− Multiple endemic diseases− Zoonoses− Source of disease− Movement controls

− Mostly public sector interventions

‘High growth with externalities’

− Mostly monogastric− China for all sectors

− Drug resistance− Climate impacts on new vector and pathogen dynamics− Disease scares

− New animal health products to respond− Modalities of operation established

Distinguishing opportunities

Distinguishing opportunities (cont.)Trajectory

‘Strong growth’

Sector

− Ruminant meat and milk, esp. in SSA, India− Pork in some regions

Issues

− Market access and food safety− Endemic disease impacts− Zoonotic outbreaks

Opportunities

− New opportunities for novel approaches from the private animal health sector

‘Fragile growth’ − Some smallholder and pastoral systems; little part in the production response

− Multiple endemic diseases− Zoonoses− Source of disease− Movement controls

− Mostly public sector interventions

‘High growth with externalities’

− Mostly monogastric− China for all sectors

− Drug resistance− Climate impacts on new vector and pathogen dynamics− Disease scares

− New animal health products to respond− Modalities of operation established

Rapidly growing mixed systems areripe for novel animal health solutions

Animal health challenges of strong growth trajectories

Intensifying and increasingly market-oriented(and sometimes transforming) smallholder systemspresent animal health challenges

Market access and food safety– Engagement in local, regional and international markets

is threatened by food safety issues and regulations

Endemic disease impacts– Implications for productivity, and thus addressing market demand

Zoonotic outbreaks– Intensifying systems place people and animals

in ever-closer proximity, increasing the risk of zoonoses

Innovations, incentives and institutionsfor addressing food safety

• Develop, test technologies• Train, brand, certify informal actors including women• Development local capacity

Novel lateral flow assays for cysticercosis Women butchers sell safer meat than men

Steinfeld et al. 2006

Big productivity gaps, largely due to poor animal health, persist between rich and poor countries

Some developing country regions have gaps of up to 430% in milk

Annual losses from selected diseases:Africa and South Asia

BMGFEndopara

sites

PPRCBPP

Ectopara

sites

CCPPFM

DTry

ps

Shoat pox

Newcastl

e

Bruce

llosis

Bovine TBLS

DRVF

ECFBVD

0

1

2

3

4

5

6

7

8

South AsiaAfrica

Billi

on $

lost

yea

rly

AfricaSouth Asia

• Animal disease is a key constraint:Remove it and animal productivity increases greatly

• As livestock systems intensify in developing countries, diseases may increase

Young Adult

Cattle 22% 6%

Shoat 28% 11%

Poultry 70% 30%

Otte & Chilonda IAEA

Annual mortality of African livestock(About half due to preventable or curable diseases)

Animal disease is a key constraint in Africa

Almost all losses are in developing countries

A deadly dozen zoonotic diseases each yearkill 2.2 million people and sicken 2.4 billion

Lept

ospi

rosis

TB (zoo

)

Rabie

s

Cystic

erco

sis

Leish

man

iasis

Bruce

llosis

Echin

ococ

cosis

Toxop

lasm

osis

Q feve

r

Sleep

ing

sickn

ess

Anthr

ax0

20000

40000

60000

80000

100000

120000

140000

Annual deaths from all zoonoses Annual deaths from single-agent zoonoses

Greatest burden of zoonoses falls onone billion poor livestock keepers

Map by ILRI, from original in a report to DFID: Mapping of Poverty and Likely Zoonoses Hotspots, 2012

1998

2007

African swine fever threatensUS$150-billion global pig industry

Recent reports indicate ASF has moved into Belarus, Poland and Lithuania

Health and feed marketvalues and approaches

The cost:• Emerging animal disease outbreaks in the last decade: $200bn• Zoonoses (1998–2009): $6.7bn/yr

The value (2010/2011):• Global animal health = multi-billion-dollar industry• Global human health market = $1,000 billion• Global animal health market

(livestock + pet + other) = $20 billion• Global livestock health market = $13 billion• Africa and South Asia = $0.5 billion• Market shares = drugs 63%, vaccines 25%, feeds 15%• Africa = +15.7% year-on-year growth (2nd after Latin America)

Animal health markets: Big and growing, incl. in developing countries

Animal health markets:India example

• 500 million livestock,1 billion poultry

• Livestock sector is 2nd-largest contributor to GDP (6%)

• Largest dairy producer (and will remain so for decades)

• Animal health marketannual growth over 8%

• Worth $370 million in 2008:52% cattle, 38% poultry

• Poultry alone could worth be over $1billion by 2030

Animal health markets: Opportunities in developing countries

• Appropriate packaging/marketing (e.g., drugs in smaller packages)

• Delivery systems for small farms

• Surveillance for drug resistance

• ‘One Health’ approaches and ‘Rational Drug Use’ for both people and animals

• ‘Game-changing products’:e.g., vaccines for Newcastledisease and East Coast fever

• Quality assurance forveterinary medicines

8%

4%

4%

4%

3%2%2%

16%23%

22%

12%

China

US

Canada

Mexico

Japan

Brazil

EU-25

India

KoreaRussia

Other

Manufactured compound feed

Total in 2008:635 million tonnes from four major sources

Total in 2013:Almost 1 billion tonnes; valued at US$370 billion

Estimated growth:2% per annum

World feed producers contribution to animal feed: 2008

IFIF, 2008 and 2013

Animal feed markets:Trends in developing countries to 2030

• Use of crop residues decreases,but still comprises >50% of livestock diets in SSA andSouth Asia

• Use of crop by-products(oilcakes etc.) and concentrates increases, but remains <10%, except in India dairy (25%)

• Planted forages increase

• Feed bought frommarkets increases

World Bank 2012

Animal feed markets:Opportunities in developing countries

• Feed technology– Food-feed crops– Ration formulation;

processing and storage– Forage seed production

and marketing

• Institutional and market issues

• Feed regulatory policies

• Animal numbers and productivity

Scenarios

Variables that influence trajectories

• Slow variables, e.g.:– Climate change– Technological change

• Fast variables, e.g.:– Changing market dynamics

• Thresholds or ‘tipping points’:– Disease outbreak– New trade restrictions– Climate-related policy imposition– Technological breakthrough– ‘Wild cards’ = the unknowns

Global scenarios

• Globalscenarios:– Millennium

Ecosystem Assessment– IAASTD– IPCC etc.

• Livestock-sectorscenarios:– ‘climate catastrophe’– ‘sustainable solutions’– ‘pandemic disaster’

(unpredictable)

Example of global scenario

More sustainable diets − convergence towards consumption of 75g/capita/day of animal-source foods

Varied levels of consumption of animal-source foodsContinued inequality of diets

Inequalities in levels of consumption of animal-source foods are exacerbated

IPCC panel: Shared socioeconomic pathways

Livestock scenario: Climate catastrophe

• With broad acceptance that a +2oC climate increase has occurred, drastic policies are put in place to prevent a further rise to +4oC– The livestock sector

is heavily taxed forits contributions toGHG emissions

– Prices for livestockcommodities skyrocket

– Livestock production,sales and consumptionall plummet, leadingto increased poverty,hunger and malnutrition

Livestock scenario: Sustainable solutions

Governments and development donors:• tackle food and nutritional security as well as poverty• dramatically increase their support for livestock producers

Success breeds more success:• milk in India• pigs in Vietnam• dairy in Kenya

Smallholder livestock producersbecome major instruments for:

• Food/nutrition security• Multiple livelihood benefits• Environmental protection• Healthy food systems

Livestock sector scenario solutions

• Technical:Solutions for the two scenarios are similar– Improved efficiency

of livestock productionthrough better feeding,genetics and health

• Institutional:Solutions for the two scenarios differ – Packaging, delivery,

market response

Animal agriculture to 2050: Trends, trajectories, scenarios

GLOBAL TRENDSLivestock demand, productionand change are all increasingrapidly in developing countries

TRAJECTORIES OF CHANGEThe greatest changes will occurin the smallholder sector

FUTURE SCENARIOSBig opportunitieslie in the developing countries

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