Livestock production

5.1 Introduction

Livestock production is the world's largest user of land, either directly through grazing or indirectly through consumption of fodder and feedgrains. Globally, livestock production currently accounts for some 40 percent of the gross value of agricultural production. In industrial countries this share is more than half. In developing countries, where it accounts for one-third, its share is rising quickly; livestock production is increasing rapidly as a result of growth in population and incomes and changes in lifestyles and dietary habits.

Growth in the livestock sector has consistently exceeded that of the crop sector. The total demand for animal products in developing countries is expected to more than double by 2030. By contrast, demand for animal products in the industrial world has been growing at low rates, and livestock production in this group of countries is expected to grow only slowly over the projection period (see Table 5.1).

Satisfying increasing and changing demands for animal food products, while at the same time sustaining the natural resource base (soil, water, air and biodiversity), is one of the major challenges facing world agriculture today. Global agriculture as a whole will be increasingly driven by trends in the livestock subsector, many of which are already apparent:

• An increasing proportion of livestock production will originate in warm, humid and more disease-prone environments.
• There will be a change in livestock production practices, from a local multipurpose activity to a more intensive, market-oriented and increasingly integrated process.
• Pressure on, and competition for, common property resources such as grazing and water resources will increase.
• There will be more large-scale industrial production, located close to urban centres, with associated environmental and public health risks.
• Pigs and poultry will increase in importance compared with ruminants.
• There will be a substantial rise in the use of cereal-based feeds.

Meeting these challenges raises crucial global and national public policy issues that must be addressed. Broadly, these encompass equity and poverty alleviation, the environment and natural resource management, and public health and food safety.

The main purpose of this chapter is to discuss the factors and perspective issues underlying the projections for livestock production as presented in Chapter 3. Developments in demand for livestock products will be briefly summarized in Section 5.2 and those for production of livestock commodities in Section 5.3. This latter section also discusses issues in increasing livestock productivity and expected changes in livestock production systems. Some selected livestock-related issues expected to take on greater importance over the projection period are dealt with in Section 5.4.

5.2 Consumption of livestock products

As incomes increase, demand for greater food variety grows. Demand for higher-value and quality foods such as meat, eggs and milk rises, compared with food of plant origin such as cereals. These changes in consumption, together with sizeable population growth, have led to large increases in the total demand for animal products in many developing countries, and this trend will continue.

The rising share of animal products in the diet is evident in developing countries. Even though calories derived from cereals have increased in absolute terms, as a share of total calories they continue to fall, from 60 percent in 1961/63 to an expected 50 percent in 2030. Similarly, the contribution of other traditional staples (potatoes, sweet potatoes, cassava, plantains and other roots) fell from second largest contributor to dietary calories (10 percent) in 1961/63 to lowest (6.2 percent) by 1997/99. By then, animal products had become the second major source of calories (10.6 percent) in developing countries.

In industrial countries, cereals contribute significantly less as a share of calories consumed - around 34 percent - while the contribution of animal products has remained stable at around 23 percent. In developing countries the per capita consumption of animal products is still less than a third of that in industrial countries, so there remains a significant potential to increase the contribution of animal products to the diet, both in absolute and percentage terms.

In industrial countries, the consumption of animal proteins increased in the 1960s and 1970s from 44 to 55 g/capita/day. After this, animal protein consumption remained fairly stable. In developing countries, however, although the level of consumption of animal proteins increased steadily from 9 g/capita/day in 1961/63 to 20 g/capita/day in 1997/99, there is still significant potential for increases.

Between 1997/99 and 2030, annual meat consumption in developing countries is projected to increase from 25.5 to 37 kg per person, compared with an increase from 88 to 100 kg in industrial countries. Consumption of milk and dairy products will rise from 45 kg/ person/p.a. to 66 kg in developing countries, and from 212 to 221 kg in industrial countries. For eggs, consumption will grow from 6.5 to 8.9 kg in developing countries and from 13.5 to 13.8 kg in industrial countries.

Wide regional and country differences are also evident in the quantity and type of animal products consumed, reflecting traditional preferences based on availability, relative prices and religious and taste preferences. Some of the more important aspects include the following:

• In sub-Saharan Africa, low consumption levels of animal products have changed little over the last 30 years. These contribute about 5 percent to per capita calorie consumption, about half the percentage of the developing countries as a whole and a fifth of that of the industrial countries. Milk contribution to total calories and protein per capita has remained constant in recent years, indicating an increase in total milk availability equivalent to population increases. Only minor increases in consumption are projected.
• In the Near East and North Africa, the contribution of animal products to the relatively high calorie consumption is small, just 8.7 percent in 1997/99. The contribution of animal products (primarily poultry meat and milk) to total calorie intake will increase to 11.4 percent by 2030.
• In Latin America and the Caribbean (excluding Brazil), consumption of animal products (meat) historically has been higher than in other developing country groups and is predicted to increase further. Currently, animal products provide 16.6 percent of the dietary energy, but meat consumption per capita is still only about 60 percent of that of industrial countries, implying that there is scope for further growth.
• Brazil is unusual in terms of its large and increasing dietary contribution of animal products (18.8 percent in 1997/99). The gap between Brazil and the rest of Latin America is expected to widen. Meat consumption per capita, at present over three-quarters the level of industrial countries, is projected to reach the level of the latter by 2030. Per capita milk consumption, at present just over half the level of industrial countries, is projected to reach three-quarters of the industrial countries' consumption by 2030.
• In South Asia (excluding India), there has been a slow but steady growth in animal product consumption. This increase is mostly the result of an increase in the contribution of milk, already high at a per capita level 50 percent above the average for developing countries, together with an increase in the contribution of poultry meat. The contribution of eggs is well below the developing country average.
• In India, the relative contribution of animal products to diets is predicted to increase up to 2030 largely as a result of increases in the consumption of milk and milk products.
• In East Asia (excluding China) there is also a steady increase in the contribution of animal products to the diet. However, unlike South Asia, this increase is a result of the contribution of meat, predominantly pork.
• In China, the projected rapid rise in the contribution of animal products to dietary energy from 15 to 20 percent between 1997/99 and 2030 will be mainly on account of a substantial increase in the contribution of pork and poultry. Per capita consumption of milk is very low and projected to remain so (rising from 7kg p.a. in 1997/99 to 14kg in 2030). By contrast, egg consumption in China is very high - more than double the average for developing countries and even above the industrial country average - and will rise from 15 kg/ person/p.a. in 1997/99 to 20 kg in 2030.

5.3 Production

Chapter 3 details the production and trade projections for livestock commodities. This section will look more at the implications. The location of production and processing activities is increasingly determined by factors such as the availability, quality and cost of inputs and proximity to markets. With the expected expansion in demand for animal products, traditional mixed farming practices alone will no longer be capable of meeting requirements.

The supply of animal products can be increased by raising the number of animals, and by improving productivity and processing and marketing efficiency, and by adopting various combinations of these factors. In most regions, land availability limits the expansion of livestock numbers in extensive production systems, so the bulk of the production increase will come from increased productivity, through intensification and wider adoption of better production and marketing technologies.

The strongest structural trend in livestock production has been the growth of intensive, vertically integrated, intensive establishments close to large urban centres, particularly for pig and poultry meat production in East Asia and Latin America, and broiler production in South Asia. Similar trends are apparent in dairy and beef production, albeit to a lesser degree. In East Asia the growth in demand for feedgrains associated with these production systems has been met by increased imports, effectively substituting imports of livestock products by imports of feedgrains.

In framing public policies, governments and other stakeholders are confronted with important trade-offs. For example, many developing countries favour industrial livestock production in order to provide affordable animal protein to urban populations (nutritional and public health benefits). Yet this may occur at the expense of diminishing the market opportunities and competitiveness of small rural producers. Similarly, stricter food safety regulations to enhance public health constitute barriers that often prevent poor farmers from entering formal markets.

5.3.1 Livestock production and productivity

The projections of total demand for livestock products were reached by taking the projections of food demand for direct human consumption, and adding on other demand components, such as the use of livestock products for non-food industrial uses, milk consumed by offspring and eggs for hatching and wastage. Production projections for each country were arrived at by making a detailed analysis of past trade in livestock products, including trade in inputs such as cereals and oilseeds used for animal feed.

The overall results are presented in Table 5.1 (unlike Table 3.11 these are aggregated over all livestock products covered in this study, including meat, milk and eggs). The main feature is a gradual slowdown in the growth of global livestock production. This will be made up of slow growth in the industrial countries, a recovery in the transition countries and a pronounced slowdown from rapid to moderate growth rates in the developing countries. This latter trend is heavily dominated by the expected slowdown in two major countries that experienced fast growth in livestock production in the past, China and Brazil. Excluding these two countries, the slowdown is much more gradual. In individual countries, developments are much more varied, with accelerating livestock production growth in several countries.

Table 5.2 (a more detailed expansion of part of Table 3.11) gives details of the livestock production data and projections for the six livestock products covered in this study, underlying the overall results presented in Table 5.1. In developing countries there has been a continued increase in production. Annual growth rates for the six commodities ranged from 3.7 to 9.4 percent for the period 1989-99. By contrast, over the same period production in the transition countries actually fell, and grew only slightly in the industrial countries.

By 1997/99, the share of the developing countries in world meat production was 53 percent and in milk production 39 percent, compared with 40 and 28 percent only ten years earlier. This was in part a result of the collapse of production in the transition countries, but it is an ongoing trend even in the absence of this phenomenon. Annual growth of meat production in developing countries to 2030 is projected at 2.4 percent and of milk at 2.5 percent. This would raise developing countries' share in world meat production by 2030 to 66 percent (247 million tonnes) and in milk production to 55 percent (484 million tonnes).

The growth in white meat (pork and poultry) production in developing countries between 1989 to 1999 has been remarkable - more than double the growth of red meat (cattle, sheep and goats). There are, however, major regional differences. Growth in poultry production has been spectacular in East Asia (11.7 percent p.a.) and South Asia (7.2 percent p.a.) and reflects the rapid intensification of the poultry industry in these regions. Latin America saw annual growth rates of 9 percent. Yet in sub-Saharan Africa the annual growth rate was only 2.6 percent. Red meat accounted for almost 37 percent of total meat production in the developing countries in the late 1980s, but declined to 31 percent in 1997/99 and this proportion is expected to decline further.

Egg production increased in developing countries during the last ten years (1989-99) with similar regional differences. Annual growth rates for East Asia, South Asia and sub-Saharan Africa were 10.7, 4.7 and 2.6 percent, respectively. Latin America saw a growth rate of 2.5 percent p.a. and the industrialized countries 0.9 percent p.a., while in the transition countries production fell by 4.7 percent p.a. Milk production in developing countries grew at 4.1 percent p.a. over the same period, with the highest annual growth found in South Asia (4.9 percent) and the lowest in sub-Saharan Africa (1.9 percent). Milk production in industrial and transition countries followed the same trend as egg production.

Productivity can be measured by the amount of meat or milk produced per animal per year. More sophisticated productivity analyses - based on unit of output per unit of biomass or feed input or based on financial flows - are much more difficult to undertake. For example, in high-income countries there is a growing demand for free-range meat at premium prices, and this might still allow farmers to make higher net returns despite lower carcass weight and lower offtake rates.

Increased production can be achieved by a combination of expansion in animal numbers and increased productivity. Higher productivity is a compound of higher offtake rates (shorter production cycles by, for example, faster fattening), and higher carcass weight or milk or egg yields. The projections show that the increase in livestock numbers will remain significant, but less so than in the past. Higher carcass weights will play a more important role in beef production, while higher offtake rates (shorter production cycles) will be more important in pig and poultry meat production.

There are problems in getting reliable data for offtake rates and carcass weights. To circumvent these, meat production can be compared directly with herd sizes. For example, over the last decade (1989-99), beef production in developing countries increased by 3.8 percent p.a., while cattle numbers increased by only 1.3 percent (Table 5.3), implying an annual productivity improvement of 2.5 percent. Small ruminant production increased by 3.7 percent p.a. while flock size increased by only 1.5 percent, suggesting a 1.2 percent annual productivity improvement.

There are substantial differences between regions and countries, however. In sub-Saharan Africa the increase in cattle numbers was greater than the growth in production, indicating a decline in meat productivity. In Asia, where land is scarce, growth in herd size for cattle and buffaloes was much lower than the growth in output, indicating that intensification and increased productivity were relatively more important. Increases in productivity were also responsible for the increases in white meat and egg production.

Meat or milk output per animal remains higher in industrial countries than in developing ones. For example, in 1997/99 the yield of beef per animal (carcass weight) in developing countries was 163 kg compared with 284 kg in industrial countries, while average milk yields were 1.1 and 5.9 tonnes p.a., respectively. Pork and poultry productivity levels are more similar across regions, reflecting the greater ease of transfer and adoption of production techniques.

5.3.2 Production systems

The changes in global demand for animal products and the increasing pressures on resources have important implications for the principal production systems found in developing countries.

Grazing systems. A quarter of the world's land is used for grazing, and extensive pasture provides 30 percent of total beef production and 23 percent for mutton (FAO, 1996e). In developing countries, extensive grazing systems have typically increased production by herd expansion rather than by substantial increases in productivity. However, globally the market share from these extensive systems is declining relative to other production systems. The availability of rangelands is decreasing, through arable land encroachment, land degradation, conflict and so on. Hence the scope for further increasing herd numbers in these systems remains limited.

Crop-livestock production systems. In developing countries, most ruminant livestock are found in mixed farming systems. These are estimated to provide over 65 percent of beef, 69 percent of mutton and 92 percent of cow milk (FAO, 1996e). The complementarity between crop and livestock production is well known. Crops and crop residues provide feed, while livestock provide animal traction, manure, food, a form of savings or collateral, income diversification and risk reduction. Although short-cycle species, such as chickens and pigs, are often very important for household food security and immediate cash needs, only ruminants can convert highly fibrous material and forages with little or no alternative use into valuable products. An estimated 250 million work animals provide draft power for cultivation of about half the total cropland in developing countries.

Intensive industrial livestock production systems. The trend towards intensification is most pronounced in Asia, where there is a shortage of land but an abundance of relatively cheap labour. This has encouraged small-scale intensive systems such as “cut and carry” and stall feeding, which have higher labour but lower land requirements. Increasing access to capital has allowed for investment in machinery, housing and inputs such as improved breeds, concentrate feeds and veterinary drugs. This has resulted in improved productivity and has accounted for faster growth in production of monogastric animals such as pigs and chickens than of ruminants. The consequence has been a reduction in the value of livestock's alternative uses, as the value of its food products becomes relatively more important.

In sub-Saharan Africa, semi-intensive and intensive dairying has developed close to urban centres and, where agro-ecological conditions permit, on the basis of cultivated fodder and agro-industrial by-products. In Latin America, intensive poultry production and, to some extent, dairying have developed partly in response to the high level of urbanization and a resumption of economic growth in the 1990s.

Large-scale and vertically integrated intensive industrial poultry and pig production systems have increased significantly in the developing world, particularly in East Asia. They make use of improved genetic material and sophisticated feeding systems, and require highly skilled technical and business management. They are also dependent on inputs of high-energy and protein-rich feeds and animal health prophylactics, and consume considerable amounts of fossil fuel, both directly and indirectly. The wholesale transfer of these types of production systems has been facilitated by the relative ease and speed with which the required infrastructure and equipment can be operationalized in so called “turnkey” operations. In recent years, industrial livestock production grew at twice the annual rate of the more traditional, mixed farming systems (4.3 against 2.2 percent), and at more than six times the annual growth rate of production based on grazing (0.7 percent; FAO, 1996e). The major expansion in industrial systems has been in the production of pigs and poultry since they have short reproductive cycles and are more efficient than ruminants in converting feed concentrates (cereals) into meat. Industrial enterprises now account for 74 of the world's total poultry production, 40 percent of pig meat and 68 percent of eggs (FAO, 1996e).

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