1 Global Feed Demand and Supply: Prospects and Implications Zhangyue Zhou Asian Agribusiness Research Centre The University of Sydney

2 Worldwide animal husbandry development Rapid increase in meat production worldwide

3 The term, “The Livestock Revolution” - IFPRI 2020 Vision Discussion Paper (Livestock to 2020: The Next Food Revolution). A structural phenomenon that is here to stay. Challenges, especially in developing countries: –Environmental protection –Natural resource protection –Prevention and control of animal diseases –Prevention of disease cross-infection between animals and human beings –Supply of additional feed

4 Outline 1.Feed versus food: emerging trends in demand 2.Feed demand and supply: global perspectives 3.Matching the demand with supply 4.Meeting the increasing demand for feed: challenges for future farming 5.Implications

5 Insight into China’s feedgrain markets Valuable for government grain policies Valuable reference for further research

6 1. Feed versus food: emerging trends in demand Worldwide increase in the consumption of animal products Marked increase in developing countries Between the mid 1960s and late 1990s, per capita consumption of meat in developing countries rose by 150% and that of milk and dairy products by 60% Trend to continue

7 Globally, per capita animal product consumption will continue to rise. Source: FAO report.

8 China factor Total meat production (mt) Per capita meat consump- tion (kg)

9 China’s urban income and consumption China’s rural income and consumption

10 An increasing share of cereals is used for feed purposes, especially in developing countries. Source: FAO report.

11 2. Feed demand and supply: global perspectives Global feedgrain demand will further increase. Source: FAO report.

12 At the global level, cereal demand will be met by the supply with a small surplus, implying that there will be sufficient cereals for feed use. SSR: self-sufficiency rate = production/demand. Source: FAO report.

13 Developing countries will experience a shortage of cereal supply. Source: FAO report.

14 In developing countries, feed use of cereals will more than double. SSR: self-sufficiency rate = production/demand. Source: FAO report.

15 China’s feedgrain demand and import requirements are likely much smaller than previously projected. Source: GRDC report.

16 China’s feedgrain demand and import requirements: GRDC project and previous studies Source: GRDC report.

17 3. Matching the demand with supply Developing countries will have major cereal feed shortages. They will have to source extra feed cereals from the world market.

18 Source: FAO report. Coarse grain shortages in developing countries can be met by the surplus available from industrial and transition countries.

19 Countries in sub-Saharan Africa are unlikely to import feed cereals to any great extent. Within developing countries, who will be the major importers?

20 Countries in South Asia are unlikely to import much cereal feed either.

21 Countries in Latin America and the Caribbean regions together will not be the major feed importers either.

22 Countries in Near East/North Africa are likely to be the major importers of cereal feed.

23 Developing countries in East Asia are also likely to be the major importers of cereal feed.

24 East Asia and Near East/North Africa will also be two major meat-importing regions. Source: FAO report.

25 Major corn importers (2003) World total imports: thousand tonnes

26 Major corn exports (2003) World total exports: thousand tonnes

27 When China turns from being the current net feedgrain exporter to a net importer, corn will be the most likely imported item. When the need arises for China to import feedgrains, where China will source these imports will be largely governed by market signals given that China is now a member of the WTO.

28 4. Meeting the increasing demand for feed: challenges for future farming Increase in animal product consumption will pose significant challenges for future farming as it has to produce enough feed to raise additional animals. Where will the increased feed come from?

29 Broad Classification of Feed Sources

30 Farmers in developing countries will face greater challenges in providing additional feed whilst also protecting their already strained agricultural environment. Developed countries should provide generous assistance to developing countries to develop their feed techniques and improve their animal raising practices.

31 5. The Livestock Revolution: opportunities for farmers? The rapid development of the livestock industry will benefit most farmers in both developed and developing countries. Benefit to farmers in developing countries will vary with farm size. Farmers in China?

32 Questions remaining Sufficient feed supply in China? Imports needed? What to import: feed or animal product? How much to import? Should China import feed or animal products? How can China capitalise on the so- called “Livestock Revolution”?