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Global livestock markets: outlook, policies, and future challenges Nancy Morgan, Livestock Economist FAO/World Bank 1 The Livestock Revolution revisited: World Meat Production and Trade Production Driven by Gains in Poultry/Pork Sectors With Trade Growing Faster than Production Animal disease 250 20 Million tonnes 200 150 100 15 10 50 5 0 0 1990 1995 2000 2005 2008 2009 Beef Pigmeat Poultry Ovine 2 90 Beef 95 2000 Pork 2004 2005 Poultry Meat 2008 Ovine 2009 The regional diversity of gains in meat consumption, 1982-2008 Developing Develped Global meat consumption gains more than doubles since the early 1980s (129=>285 mmt). Other Of the more than 150 mmt increase, Asian increases account for 100 mmt. Europe North America Latin America African consumption increases less than 10 million tons with per capita consumption rising from 13 kg-22 kg/caputa Asia Africa -50 0 50 Million metric tons 100 150 Growth in Dairy Sectors in Developing Countries Continues Unabated 2017 900,000 800,000 700,000 1,000 tons 600,000 500,000 Other developing Asia Developed 400,000 300,000 200,000 100,000 0 83 1992 2002 2007 2009 9 1 - - - 91 81 1990 2000 2005 4 201 7 Over the past twenty-five years developing countries contributed nearly threequarters of global consumption gains for both meat and dairy .....80% of production gains came from smallholders What about the evolution in meat trading patterns? NET MEAT TRADE STATUS, 2008 Developing Develped Other Oceania Europe North America Latin America Asia Africa Key Importing Regions: Asia: 40% imports Europe: 22% imports N. America: 10% Key Exporting Regions: -10 -8 -6 -4 -2 0 2 4 6 8 Million metric tons N. America: 30% Latin America: 30% Europe: 13% Oceania: 12% Key Indicators which reveal opportunities for import substitution, 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 opportunities are domestically driven Potential in terms of consumption growth, 200 180 160 140 120 100 80 60 40 20 0 How much do we eat? Kg/caputa Per capita meat and dairy product consumption in developing countries, despite rapid gains, remains about one-third the levels of developed countries. Developed Developing Asia Africa Meat Milk Large opportunities for consumption gains in livestock products in developing countries 7 THE CRYSTAL BALL: Consumption gains to slow over the next decade…. 3.85 Milk 1998-2007 2.7 Beef 2.48 Pigmeat 2.65 Poultry 2.07 Vegetable Oils 3.07 Rice 1.09 Coarse grains (feed) 1.78 Wheat 0.57 0 8 2008-2017 2 4 6 % change per annum 8 10 ....but livestock products remain the fastest growing commodity Of key concern, however, is uncertainty about commodity price levels and price 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 Increasing complex and competitive environment 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 Lack of financing and strategic thinking by policy makers leads to livestock development that can be unsustainable and detrimental to rural economic development Challenges to the Livestock Sector 100 90 80 14 70 60 50 40 30 10 12 % rural poverty 8 6 4 20 10 2 % ODA to Ag - 0 1990 11 1992 1994 1996 1998 2000 2002 2004 % ODA to agriculture % poverty in rural areas Donor support to agriculture Current World Bank Livestock Portfolio 28 Millions (current $) 700 30 • 25 • 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 600 20 500 400 14 15 300 200 7 7 4 10 Number of Projects 800 5 100 0 5 0 AFRVP EAPVP ECAVP LACVP MNAVP SASVP 12 Lifting livestock’s long shadow From degradation to carbon sequestration From desertification to sustainable management From pollution to biogas and clean water The Global Zoonotic Disease Challenge beyond Avian Influenza Certainly the high and pervasive costs of animal disease are fostering concerns about animal industries 1/ Indirect costs not available. 10 $9.2 8 US$billion Indirect Direct $6.6 6 $3.8 4 $2.3 2 $.433 $.015 $.08 $.500 15 BSE N Ja p et h an er la nd s 1/ 1/ ea K or .K . U ru gu ay U an Ta iw N et h U er la nd s .K . 0 CFS FMD AI PLATFORMS FOR INVESTMENT IN LIVESTOCK FOOD CHAINS Ensuring sustainable systems to support livestock development (with a particular emphasis on mitigating environment impact) Facilitating safe marketing and cross border trade in animal products Safety of livestock food chains 16 LOTS OF KNOWLEDGE Understanding how to support livestock sectors: Markets, budgets and investments 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 Botswana (75-80)1 44 Ethiopia 33 11 Kenya 40 34 Lesotho 58 28 Malawi 6 21 Swaziland 16 East & Southern Africa 48 Source: Addis Anteneh (1991). Estimates from various sources. Staff and non-staff costs: The crisis of animal health services. 1 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.