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Population growth, improving diets drive higher food demand projections

Agriculture.com Staff 07/30/2008 @ 7:22am

With the exception of sub-Saharan Africa, most of the developing world is moving toward mass-marketed food that includes more meat consumption, an economist with Rabo Agrifinance told the 2008 class of the New Century Farmer program Tuesday.

Fiona Boal, executive director of food and agribusiness research, said that Rabobank (the world's 20th largest lender and a major force in lending to agriculture and the food industry) expects 14% growth in global grain consumption over the next decade. Ethanol is a factor, she said, but most of the growth will be driven by increased demand for meat, which Rabobank expects to increase 25% over the next 10 years.

"That's quite an enormous increase in the production of meat over a period of time," Boal said. It's actually a conservative projection that smaller than what many economists expect. In China alone, Rabobank looks for a three-percent annual increase in meat consumption over each of the next three years. That means that China will have to import more meat, even though government officials want to promote self sufficiency.

All this is driven by population growth as well, an increase of 2.5 billion people on the planet by 2050, from 6.7 billion to 9.2 billion.

However, the diets and food preferences of many consumers around the world will be influenced by aging. Even in China, the population will have a higher average age, due to that country's policy of encouraging couples to have only one child.

Boal said she has a colleague in Beijing who tells her that "she is the only person she knows who has two children."

Of the major countries, only India will not see a decline in working age population, she said.

In countries wth an aging population, especially high income nations in Europe and North America, older consumers will want small portion sizes and will be interested in the health attributes of different foods.

Boal didn't say much about the food versus fuel debate, but she said that 60% of the growth in demand for edible oils, mainly palm oil and soybean oil, will come from growing biodiesel production. Rabobank expects edible oil production to grow by 18 mllion tons by 2012.

Much of the biodiesel production growth will be in Malaysia and Indonesia, from palm oil, she said. She expects some increased biodiesel production in Europe.

"The forecast assumes very little increase in production in the U.S.," she told Agriculture Online. That's due in part to the high prices U.S. ethanol makers have to pay for soybean oil.

Increased demand for food is driving higher prices for farmland worldwide, too.

Boal said that investors in Europe and England are investing in farmland in eastern Europe and The Ukraine.

With the exception of sub-Saharan Africa, most of the developing world is moving toward mass-marketed food that includes more meat consumption, an economist with Rabo Agrifinance told the 2008 class of the New Century Farmer program Tuesday.

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