Tracking global food trends

Major global food demand-and-supply trends, identified and monitored by the Food and Agricultural Organization of the United Nations, were already visible before the onset of COVID-19. The pandemic, and governments’ reactions to it via lockdown restrictions, merely accelerated these trends, says Dr Koos Coetzee.

Tracking global food trends
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The Food and Agricultural Organization of the United Nations (FAO) recently identified a number of trends that will affect the global food sector. These include:

Fast growth in food demand
Global food demand is growing as a result of rapid population growth and increased per-capita food consumption. Changes in per-capita food consumption have coincided with a shift in dietary patterns. Developing countries have seen a rapid growth in per-capita consumption of livestock products (meat, milk, eggs), vegetable oils and, to a lesser extent, sugar.

These three product groups now provide 29% of total food in developing countries. According to the FAO, this will increase to 35% by 2030.

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In developed countries, livestock products, vegetable oils and sugar provide nearly half of all food requirements.

In developing countries, demand for livestock products has increased at a rapid rate over the past decade. Milk consumption has nearly doubled, meat consumption has tripled, and consumption of eggs has increased by 500%.

As the global population grows and consumer income increases, food demand, especially for livestock products, will continue to grow.

The pandemic, meanwhile, has accelerated the trend towards online shopping at the expense of direct shopping.

Natural resources will become scarcer
The demand for natural resources such as land and water will increase in future. Population growth, urbanisation, higher consumption of livestock products, bio-energy production, food exports and the commercialisation of production from natural resources will put more pressure on already scarce natural resources. Non-food demand for biomass such as pulp and paper will grow.

Energy demand will increase
Fossil fuels will continue to provide more than 80% of global energy requirements. Nonetheless, renewable energy will provide a larger share of total energy use in future. Bio-energy contributes about 10% of total energy use, with the bulk produced from biomass. Biofuel production from crops will see increased demand for land for crop production.

The globalisation of food production
Worldwide, the size of farms is increasing due to economies of scale and other factors.
Global food companies have developed efficient supply chains in developing countries. While these have brought much-needed foreign direct investment into countries, their presence has resulted in the demise of many smaller food-processing companies.

Food prices increase
The FAO’s food price index has shown an upward trend since April 2020. International grain prices are high and will probably remain so. International soya bean prices doubled from April 2019 to R8 000 in March 2021. Maize prices are also higher, with export parity at R3 000/t.

In South Africa
The drastic lockdown in 2020 affected consumer demand. While retail demand in general was down, food sales were higher. As consumers saved on fuel, alcohol and holiday expenses, they had more money to spend on basic food. Thus, despite negative economic growth and massive unemployment, food sales are still growing.

After the widespread drought of the past couple of years, the supply of red meat is also lower as farmers try to rebuild herds. The growing demand and weak supply resulted in firmer prices.

Farmers and agro-processors provided food to suffering communities during the pandemic. This, plus the efficiency of the agricultural supply chain, resulted in consumers viewing farmers and farming in a favourable light.

Implications for farmers
Globally and locally, demand for food is growing at a faster rate than demand for non-food products. More affluent consumers eat more protein and less starch-based foods. The higher demand for livestock products will also result in higher feed demand. Prices of both livestock and grain products will remain high.

As the food industry becomes more concentrated and the role of global companies increases, farmers will have less say in pricing decisions. Farmer-controlled businesses offer a partial solution to this problem.

Dr Koos Coetzee is an independent agricultural economist.

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