Milling News
The Pelletier Column
Leading towards a collaborative future
by Christophe Pelletier Not only the world population is growing but, as economic prosperity increases in more and more countries, so does the share of animal protein in the overall food consumption. For a large part, feeding the iconic number of nine billion people by 2050 will be about feeding the farm animals required to meet future demand for animal products. When supply and demand shows a strong imbalance between two adjacent links of the value chain, business always feels quite unfair for at least one of them. Money actually enters a value chain only from the consumer end, and that money needs to be distributed among all the links. When agricultural markets are turbulent, being caught between the rock and the hard place is not the most comfortable. The animal feed industry knows the feeling well. In most cases, the pain is more of a result of a lack of preparedness to adapt timely than because of just price variations. Success in feeding a growing population will depend mostly on the ability to foresee and to anticipate future demand, both from a quantitative and qualitative point of view. It is a collective exercise that requires the participation of all the stakeholders. What seems a rock and a hard place is also a bridge between vegetal and animal productions. It puts the feed industry in an ideal position to play a leading role in shaping efficient value chains. In terms of degrees of separation, the feed industry is the one closest with the highest numbers of links. Towards the consumer end of the chain, it has relatively easy access to knowledge on market trends. From the crop production end of the chain, the industry follows agricultural commodities’ markets closely. By bringing together knowledge from both the consumer end and the crop production side -and thus helping the other links to produce and supply the corresponding volumes and quality that markets want- a lot of optimization all through the chain is possible. Let’s face it, leading and organizing such an ongoing optimisation and planning is no small task. The information and the knowledge are available in many formats and in many places, though. The rise of innovation and of new technologies that allow the collection, monitoring and processing of quantity of data never seen before will be of great help to make markets more transparent. Optimising through long-term planning has many benefits. One is to help coordinate forecasts and plans for both vegetal and animal productions. 18 | Milling and Grain
Thus, it reduces the chances of heavy shortages or surpluses that result in a succession of enthusiastic booms and brutal slowdowns, while consumption shows a steady increase. Another benefit is to help create greater value for all the partners in the chain, as it helps balance supply and demand more effectively. This works towards a better sharing of value, reduces uncertainty and allows farmers and businesses to plan better on the long-term to keep up with demand. Most of the talk about how much food to produce by 2050 tends to revolve around the 70 percent more than in 2010 indicated by the FAO. This is not enough. Not all food groups will see the same demand increase. For instance, an average chicken consumption increase of 10kg per Chinese represents a need for an additional production volume equivalent to the current US chicken production. Demand for animal protein, produced on land and in the sea, will be significantly above average. Within that group, there will be differences, too. In particular, poultry and aquaculture will lead consumption growth. Demand for grain will keep shifting from human consumption to animal feed. Demand for legumes as well as oilseeds will probably be more challenging to meet than for grains. The feed industry will also have to keep exploring alternative raw materials. Crop production conditions are also expected to change and so are production areas. Water availability and climate change is already redrawing the world’s agriculture map. Futures scenarios will have to give a local breakdown of global objectives in particular because of different consumption patterns between regions. As market differentiation will increase in the future, the scenarios must not be limited to volumes only. They also must take into account future demands about quality criteria of food and agricultural products. They will have to include food safety, health benefits and environmental impact aspects as well. Agricultural commodity markets are likely to further evolve towards pricing that will include nutritional characteristics. As market requirements evolve, food consumption and production conditions change, the scenarios will have to include infrastructure as well as organizational and logistical changes that will come along to produce and to supply the growing population efficiently and sustainably.
Christophe Pelletier is a food and agriculture strategist and futurist from Canada. He works internationally. He has published two books on feeding the world’s growing population. His blog is called “The Food Futurist”.