Strong potential to expand food production in Latin America and the Caribbean, says new OECD-FAO report

30/05/2022

Santiago, Chile -  According to the new OECD-FAO Agricultural Outlook, agricultural and fish production in Latin America and the Caribbean is projected to expand by 14 percent over the next ten years.

The report explains that around 64 percent of this growth will emanate from crop production, about 28 percent from the livestock sector and the remaining 8 percent from fish.

The region will remain the largest producer of soybeans in the world, accounting for 53 percent of global production by 2031. The region’s contribution to global cereal production is smaller, but its share of maize production is set to rise to almost 18 percent by 2031.

Poultry production will account for more than 55 percent of growth in meat production by 2031, with bovine and pork production accounting for 29 percent and 16 percent, respectively. Fish production will recover from a modest contraction over the past ten years to register growth of 12 percent by 2031.

Productivity gains are expected to continue, with average yield gains of around 10 percent projected by 2031 for most major crop commodities.

GHG emissions projected to grow marginally

The new OECD-FAO report says that greenhouse gas emissions are projected to grow marginally by 0.1 percent per year over the next decade. The bulk of this increase will come from crop production, where emissions will increase by 3.2 percent over the ten-year period, compared to an increase of 2.3 percent from livestock production. However, relative to the net value of agricultural production, emissions per unit value of output are set to decline, albeit at a slower rate than in the past.

Consumers are slowly changing dietary patterns

The report warns that food quality amongst low-income segments of the regional population tends to be affected by persistent poverty challenges, and that macroeconomic instability and food prices may have considerable impact on food security in the region in the coming decade.

Following a short-term decline, influenced by the impact of the pandemic on purchasing power and the prolonged recovery, average per capita calorie intake is projected to rise in the medium term to reach 3077 kcal/day by 2031. This means an increase of 60 kcal/day from 2019-21 levels and is mainly attributed to animal products.

Despite a decline in sugar consumption, Latin America and the Caribbean will remain the largest sugar-consuming region in the world on a per capita basis. Per capita protein intake is expected to rise to 89 g/day by 2031, an increase over the period of 3.1g/day. Animal products will contribute the bulk of the increase at over 70 percent, with higher consumption of dairy products contributing the majority.

Per capita meat consumption is projected to rise by only 3.3 percent over the next decade. Consumption of fish, which on a per capita basis is only about half the world average, will rise by only 1 kg/capita to 10kg, comparable to the past decade.

Open trade orientation is crucial for the region’s agri-food sector

The OECD-FAO report states that by 2031 the region is expected to account for 18 percent of global food exports.

Robust supply growth will enable the region to consolidate its position as a major exporter: by 2031, the region will account for 61 percent of global exports of soybeans, 59 percent of sugar, 45 percent of fish meal, 43 percent of maize, 40 percent of beef and fish oils, 32 percent of poultry and 25 percent of ethanol.

Given the importance of the region in the global market, the extent of openness to trade will have significant consequences for the sector and for global food security.