Rising middle class provides additional challenges in feeding the world

Denver, Colo. – With discussions focusing on the ability of agriculture to feed the world over the next 40 years, information is readily available about the technology that will be needed to meet consumption demands, but Senior Director of the Knowledge Exchange Division at CoBank Terry Barr questioned the economic impact of such demands.
    “This industry has always had to deal with volatility in feed costs, and we introduce a lot more volatility with exports, regulatory requirements and food safety,” he mentioned in the opening session of the National Institute for Animal Agriculture Conference on March 27. “It is beginning to squeeze the industry.”
    “We will have to reshape the livestock industry going forward,” said Barr. “I am less concerned about the capacity to do it and more concerned about the structure of the industry.”
The driver
    “We will add 3 billion people over 40 years, and most of that will occur in Asia and Africa,” Barr said, adding that Asia has the fastest growing middle class, while African populations see the highest incidence of inability to provide food to its people.
    A 42 percent global population increase means that agriculture will be responsible for providing a 49 percent increase in cereal production and 85 percent increase in meat production above 2005 levels, according to Barr.
    “If we look at only developing countries, the increase in population is about 54 percent. Their cereal production must go up 61 percent and meat must go up 132 percent,” Barr said. “If they are able to do that, they will rely on imported meat.”
    In these developing countries, Barr noted a dramatic movement into the middle class will result in the higher meat demands.
    “We will see 2 to 3 billion people enter the middle class, and almost all of that shift will be in Asia,” he said. “When people get into the middle class, they begin to demand a different diet.”
    Barr added, “Beef consumption grows most rapidly as people enter and pass through the middle class. We will have to increase beef production by 73 percent in the next 40 years to satisfy that demand.”
    “There is a fairly lengthy list of constraints,” commented Barr, listing land availability, water supply, technology, climate, energy, food waste and loss, food safety and government policy as a few.
    Addressing these constraints before they become widespread problems will be important, as well.
A look at natural resources
    As has been echoed by others, Barr marked water as a resource of growing importance.
    “Water will probably be the most strategic resource going forward,” Barr said.
    He noted that, also assuming no gains in efficiency, we will see a 40 percent gap between the available water and water needed, and to accommodate shortening supplies, Barr said yield increases in agriculture will be necessary. Yield increases also are important in addressing concerns of land availability.
    “The amount of land area that we can increase is on the order of 10 to 15 percent – not much,” said Barr. “Asian economies are trying to develop food security on the basis of long-term land leases.”
    These leases guarantee land will be available for food production in the future, largely since the areas expecting the largest population growth already see strained land availability.
    Climate change, noted Barr, is the wildcard when looking at resources and changes in the industry.
    “The reality is that if temperatures increase, that will put more strain on technology and the availability and use of acreage,” said Barr.
Energy consumption
    “Energy will be the other wildcard,” commented Barr. “World energy consumption will continue to increase dramatically.”
    He noted that increases will be seen most quickly outside advanced economies and, while liquid fuels will continue to be an energy source, natural gas and renewable energy will become increasingly important.
    “When we ask analysts to do long range forecasts on oil, the answers they give range anywhere from $100 to $300 per barrel,” explained Barr. “That really isn’t very helpful in guessing where the industry is going, and it adds volatility.”
The food source
    “Food safety is an issue that will have to come back to focus on sound science, and more of the industry will have to spend more time on that,” Barr commented, noting that pressures are domestic and international.
    China and South Korea, for instance, are seeking more assurance about the safety of food, and Barr said agriculture will have to get better in responding to challenges and appealing to sound science.    
    He added that more than 20 percent of food produced was wasted or lost, which is cause for concern. Particularly in developed countries, waste is prevalent.
    “When we look at the global economy today, it is not being driven by the advanced economies, but by the emerging markets. We will continue to see this trend,” explained Barr. “We have a lot of challenges going forward.”
    “Can we feed 9 billion people? When I look at the number and the potential with regard to efficiencies and technology, the answer is yes,” Barr stated. “The question is what is the level or the relative prices for inputs that will be on the table?”
    Saige Albert is editor of the Wyoming Livestock Roundup and can be reached at saige@wylr.net.