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Can We Feed the Animals?. by: Michiel Keyzer, Max Merbis, Ferdinand Pavel Centre for World Food Studies, Vrije Universiteit Amsterdam. Origins and Implications of Rising Meat Demand. Motivation.
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Can We Feed the Animals? by: Michiel Keyzer, Max Merbis, Ferdinand Pavel Centre for World Food Studies, Vrije Universiteit Amsterdam Origins and Implications of Rising Meat Demand
Motivation Standard projections on the future of global meat and cereal markets (IFPRI, 2001; FAO, 2000) neglect huge potential for structural changes (in particular in Asia): • Consumer: - low initial per-capita consumption of meat • - high expected rates of income growth • strong increase in meat demand • Producer: - limitations of traditional feeding technologies • modernization of livestock production
Outline • 1. How to implement such changes? • Relation between per-capita income and per-capita demand for meat (Engel curve) • Modernization of livestock technology (shift from residual feed to cereals) 2. Quantitative assessment / Comparison with FAO (2000) • Implications for aggregate meat demand • Implications for demand for residual feed and cereals • 3. Conclusions
Non-Parametric Estimation of Meat Demand andPer-Capita Income (125 countries, 1975-1997)
Piecewise Linear GLS-Estimation of Meat Demand andPer-capita Income (125 countries, 1975-1997)
Consequences for Livestock Production • Who will produce the meat? • - Trade in livestock versus trade in feed • Can domestic producers satisfy the increasing meat • demand (traditional versus modern technology)? • - By how much can residuals expand? • - By how much must cereal-meat ratios increase?
Annual Growth Rates of Aggregate Meat Consumption (in Percent)
Annual Growth Rates of Aggregate Meat Consumption (in Percent)
Annual Growth Rates of Aggregate Meat Consumption (in Percent) • On a world level, our estimates exceed those of the FAO (2000) by: • 12% in 2015 and 24% in 2030 (high growth) • 6% in 2030 (low growth)
High growth of Midrange growth Zero growth of year residuals of residuals in residuals in all four regions regions 95/97 2015 2030 2015 2030 2015 2030 Sub-Saharan Africa 10 22 32 95 177 146 260 Near East/North Africa 37 95 146 130 217 153 254 Latin America and Caribbean 49 79 104 79 104 284 462 South Asia 16 42 64 65 113 79 135 East Asia 121 238 352 440 784 585 1036 Industrial Countries 317 355 421 355 421 369 480 Transition Countries 117 153 181 153 181 189 241 World 667 985 1300 1318 1997 1805 2868 Cereal Demand under various Growth Paths for Residual Feeds ( in mill. t.) Base FAO (2000) for 2030: 1100 mill. t.
Conclusions • Consideration of income distribution and three consumption regimes increases demand projections for meat significantly • Increasingly limited availability of residual feed in developing countries enforces a shift towards modern technology and increases demand for cereal feeds even further. • Magnitude of results for cereal markets is dramatic: • - Demand/technology shift: + 200 to 1,800 mill. t. in 2030 - Climate Change (IIASA, 2001): - 105 mill. t. in 2080 - GMOs: no large effects on yields expected
GLS-Estimation of Meat Demand andPer-capita Income (125 countries, 1975-1997) (I.) Further conditions: i. iii. ii. iv.
GLS-Estimation of Meat Demand andPer-capita Income (125 countries, 1975-1997) (II.)
Per-Capita Meat Consumption in China:Official Data vs. Estimates
Implications on Aggregate Meat Demand Proposition: Suppose that income growth is positive and identical for all individuals. Then, the slope of the aggregate meat-demand curve is rising (falling) with mean per-capita income if and only if there is more (less) total income spent on meat at than at .
Effect of Economic Growth on Meat Expenditure(East-Asia and high growth rates)
Effect of Economic Growth on Meat Expenditure(South-Asia and high growth rates)
Growth Rate of Aggregate Meat Consumption for Alternative Scenarios
Cc Cb Ca Ma Mb -R -R’ Cereal Feed Requirements as Function of Meat Demand
Residual Feed Intake for High Growth Rates and Constant Cereal-Meat Ratios