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Global livestock markets: outlook, policies, andGlobal livestock markets: outlook, policies, andfuture challengesfuture challenges

Nancy Morgan,Nancy Morgan,Livestock EconomistLivestock Economist

FAO/World BankFAO/World Bank

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The Livestock Revolution revisited: World Meat Production and Trade

0

50

100

150

200

250

1990 1995 2000 2005 2008 2009

Beef Pigmeat Poultry Ovine

Production Driven by Gains in Poultry/Pork Sectors

0

5

10

15

20

90 95 2000 2004 2005 2008 2009

Mill

ion

tonn

es

Beef Pork Poultry Meat Ovine

With Trade Growing Faster than Production

Animal disease

-50 0 50 100 150

Africa

Asia

Latin America

North America

Europe

Other

Develped

Developing

Global meat consumption gainsmore than doubles since the early 1980s (129=>285 mmt).

Of the more than 150 mmt increase,Asian increases account for100 mmt.

African consumption increases less than 10 million tons with per capita consumption rising from 13 kg-22 kg/caputa

The regional diversity of gains in meat consumption, 1982-2008

Million metric tons

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Growth in Dairy Sectors inDeveloping Countries Continues Unabated

Over the past twenty-five years developing countries contributed nearly three-quarters of global consumption gains for both meat and dairy.....80% of production gains came from smallholders

0100,000200,000300,000400,000500,000600,000700,000800,000900,000

1,000

tons

OtherdevelopingAsia

Developed

2017

What about the evolution in meat trading patterns?

-10 -8 -6 -4 -2 0 2 4 6 8

AfricaAsia

Latin AmericaNorth America

EuropeOceania

OtherDevelped

Developing

Million metric tons

NET MEAT TRADE STATUS, 2008

Key Importing Regions:

Asia: 40% importsEurope: 22% importsN. America: 10%

Key Exporting Regions:

N. America: 30%Latin America: 30%Europe: 13%Oceania: 12%

Key Indicators which reveal opportunities for importsubstitution, etc.

Key Indicators

Imports: % Consumption

Exports: % Production

Volume (Value ) of Imports

Developing 10 6 12

Developed 7 11 11

Europe 9 5 5.2 ($14 billion)

North America 5 17 2.4 ($6.7 billion)

Latin America 8 16 2.6 ($4 billion)

Asia 9 2 10.6 ($16.3 billion)

Africa 13 1 1.7 (1.7 billion)

WORLD 8 8 23.2 ($43 billion)

Key opportunitiesare domesticallydriven

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Potential in terms of consumption growth, How much do we eat?

020406080

100120140160180200

Meat Milk

Kg/caputa

DevelopedDevelopingAsiaAfrica

Per capita meat and dairy product consumption in developing countries, despiterapid gains, remains about one-third the levels of developed countries.

Large opportunities for consumption gains in livestock products in developing countries

8

0.57

1.78

1.09

3.07

2.07

2.65

2.48

2.73.85

0 2 4 6 8 10

Wheat

Coarse grains (feed)

Rice

Vegetable Oils

Poultry

Pigmeat

Beef

Milk

% change per annum

2008-2017 1998-2007

....but livestock products remain the fastest growing commodity

THE CRYSTAL BALL:Consumption gains to slow over the next decade….

Of key concern, however, is uncertainty about commodity price levels andprice volatility!!!!

Implications for livestock sectors:

•Focus on developing strong and competitive local markets.

• Considerable investments to be made in research and development, with a focus on alternative feeds.

•Governments should allocate money in an efficient way, looking at effective provision of services (veterinary/ extension)

• Donor funds should leverage this investment, not substitute for it!!!

Challenges to the Sector

Structure of modern food sector quickly evolving– Longer livestock value chains– Mounting pressure on resource

availabilities, including water, grazing land

Juxaposed by farming systems which in many cases are still at the preliminary stage of development

Increasing complex and competitive environment

Lack of financing and strategic thinking by policy makersleads to livestock development that can be unsustainableand detrimental to rural economic development

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-102030405060708090

100

1990 1992 1994 1996 1998 2000 2002 2004

% po

verty

in ru

ral a

reas

02

46

810

1214

% O

DA to

agr

icultu

re

Donor support to agriculture

% rural poverty

% ODA to Ag

Challenges to the Livestock Sector

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Current World Bank Livestock Portfolio

• 7 Livestock-only and 58 livestock component projects

• US 1.9 billion

• 65 % in Africa and East Asia

• Performance rating at par with other sectors

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14

7

4 57

0

100

200

300

400

500

600

700

800

AFRVP EAPVP ECAVP LACVP MNAVP SASVP

Mill

ions

(cur

rent

$)

0

5

10

15

20

25

30

Num

ber o

f Pro

ject

s

Lifting livestock’s long shadow

From degradation to carbon sequestration

From pollution to biogas and clean water

From desertification to sustainable management

The Global Zoonotic Disease Challenge - beyond Avian Influenza

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Certainly the high and pervasive costs of animal disease are fostering concerns about animal industries

0

2

4

6

8

10

U.K.

Netherl

ands

Taiwan

Urugu

ayU.K

.

Korea

1/

Japan

1/

Netherl

ands

US$

billi

on

IndirectDirect

$3.8

$2.3

$6.6

$.08

$9.2

$.433 $.015

1/ Indirect costs not available.

BSEBSE CFSCFSFMDFMD

$.500

AIAI

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PLATFORMS FOR INVESTMENT PLATFORMS FOR INVESTMENT IN LIVESTOCK FOOD CHAINSIN LIVESTOCK FOOD CHAINS

Ensuring sustainable systems to support livestock Ensuring sustainable systems to support livestock development (with a particular emphasis on development (with a particular emphasis on

mitigating environment impact)mitigating environment impact)

Facilitating safe marketing and cross border trade in Facilitating safe marketing and cross border trade in animal productsanimal products

Safety of livestock food chains Safety of livestock food chains

LOTS OF KNOWLEDGELOTS OF KNOWLEDGE

Share of livestock in agricultural GDP and livestock service in agricultural budgets, 1978/1979.

Region/Country Share of livestock GDP in agricultural

GDP (%)

Budgetary share of livestock services in agricultural services (%)

West & Central Africa

Burkina Faso 29 16

Cameroon 10 14

Gambia 21 4

Niger 29 8

Sierra Leone 7 5 East & Southern Africa

Botswana (75-80)1 44 Ethiopia 33 11

Kenya 40 34

Lesotho 58 28 Malawi 6 21

Swaziland 16 48

Source: Addis Anteneh (1991). 1 Estimates from various sources. Staff and non-staff costs: The crisis of animal health services.

Understanding how to support livestock sectors:Markets, budgets and investments

DEMAND, BUDGETS,

ENABLING

ENVIRONMENTS

LIVESTOCK INVESTMENT

AND DEVELOPMENT

75% of the world’s poor are rural and most are involved in livestock rearing or trading. Development of the sector remains fundamental for poverty reduction, economic

growth and environmental sustainability

The Challenge--- supporting sector development through effective strategy development, policy implementation, and investment.