THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES IFAD Jimmy W. Smith, Livestock Team Leader The World Bank

2 THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES 1. EXPANDING DEMAND AND SUPPLY, AND TRADE 6. QUALITY, SAFETY AND SOCIAL STANDARDS 5. LIVESTOCK AND THE ENVIRONMENT 4. LIVESTOCK DISEASE 3. FOOD-FEED-ENERGY COMPETITION 2. DRIVERS OF THE TRENDS

3 1. Expanding Demand and Supply, and Trade THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES

4 WORLD MEAT CONSUMPTION (in million tons) Source: FAPRI

5 The Livestock Revolution: Growth in all species and commodities Projected production growth of various livestock products to 2020 Livestock to 2020: The Revolution continues, Delgado et al (2003)

6 The Livestock Revolution: Growth mainly in industrial systems Livestock to 2020: The Next Food Revolution, a joint IFPRI, FAO, ILRI study. Growth Rates (%/Y) of Meat Production in Different Production Systems in Developing Countries -5% 0% 5% 10% 15% 20% AsiaSSAWANACSA grazing systems mixed systems industrial systems

7 GLOBAL IMPORT DEMAND FOR MEAT FORECAST HIGHER IN 2009

8 PORK IMPORTSPOULTRY IMPORTS Growth in Pork Trade:

9 THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES 2. DRIVERS OF THE TRENDS Population Growth Income Urbanization

10 Population Growth in Developing and Industrialized Countries:

11 A strong increase in demand for meat and milk as income grows Log per capita GNP Log per capita consumption of meat Livestock to 2020: The Next Food Revolution, a joint IFPRI, FAO, ILRI study. 10 China India Trend The Livestock Revolution:

12 Per Capita Meat Consumption, Source: IFPRI IMPACT projections, September 2007 Relatively low but increasing consumption in developing countries means that overall demand will continue to grow

13 THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES 3. FOOD – FEED – ENERGY COMPETITION

14 Balancing Needs for Food, Feed, and Fuel TOTAL WORLD GRAIN AND OILSEEDS Production, Yield, Area Harvested and Per Capita Production

15 ETHANOL PRODUCTIONBIODIESEL PRODUCTION Mostly from grain feedstocks – except for Brazil Source: USDA Agricultural Projections to 2017 Millions of gallons

16 Real world cereal prices projected to rise percent beyond current high levels Cereals Source: IFPRI

17 FAO MEAT PRICES (1998 – 200 = 100)

18 Real world meat prices projected to rise percent beyond current high levels Meat Source: IFPRI

19 4. LIVESTOCK DISEASES THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES

20 Avian Flu, EU $500m Economic Impact of Selected Diseases $50bn $40bn $30bn $20bn $10bn Source: Bio-Era. Courtesy of Dr. Will Hueston, Center for Animal Health and Food Safety, UM Estimated Cost BSE, UK $10-13bn Foot & Mouth Taiwan, $5-8bn Foot & Mouth UK $30bn Avian Flu, Asia US, Canada $10bn 2004 BSE, US $3.5bn BSE, Canada $1.5bn Lyme disease US, $2.5bn SARS China, Hong Kong, Singapore, Canada,… $50bn+ Nipah, Malaysia $ m Swine Flu, Netherlands $2.3bn BSE, Japan 1.5bn

21 EMERGING AND RE-EMERGING INFECTIOUS DISEASES

22 Source: OIE ZOONOTIC POTENTIAL OF ANIMAL PATHOGENS 60% of human pathogens are zoonotic 80% of animal pathogens are multi-host 75% of emerging diseases are zoonotic 80% of agents with potential for bioterrorist use are zoonotic pathogens Nearly all new human diseases originate from animal reservoirs

23 “Systems and Species Mix” Infrastructure IntensificaitonSpecies mix

24 Poultry Swine Urban and peri-Urban Concentration Source: FAO/LEAD

25 5. LIVESTOCK AND THE ENVIRONMENT THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES

26 Livestock’s contribution to greenhouse gas emissions NH 3 (Ammonia) 64% of total anthropogenic NH 3 emissions CO 2 (Carbon dioxide) About 2.7 billion tonnes CO 2 9% of total anthropogenic CO 2 emissions CH 4 (Methane) About 2.2 billion tonnes CO2 equivalent 37% of total anthropogenic CH4 emissions N 2 O (Nitrous oxide) About 2.2 billion tonnes CO2 equivalent 65% of total anthropogenic N2O emissions

27 5. THE ENVIRONMENT ON LIVESTOCK THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES

28 THE ENVIRONMENT ON LIVESTOCK Changing cropping patterns on feed resources (residues & range lands) Availability and access to water resources Demographices of vectors and pathogens Stress on production and productivity

29 THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES THE LIVESTOCK INDUSTRY: GLOBAL OPPORTUNITIES AND CHALLENGES 6. Quality, Safety and Consumer Standards

30 Cost of meeting changing regulatory and private standards Consumer standards Quality, Safety and Consumer Standards Environmental Animal welfare Fair trade

31 ACTIVITIES OF THE WORLD BANK Investments in Animal-Human Health Pursuing the OWOH Paradigm Investments in Livestock-Environment Investments in Community Driven Dev. –Building a Global Alliance for Livestock –Elevating the profile Coordination –Building national capacity –Learning & Sharing –Research

The World Bank 1818 H Street, NW Washington, DC USA Tel: (202) GLOBAL CHALLENGES CONFRONTING THE LIVESTOCK INDUSTRY