Published Date: 2019-06-13 | Views: 40 | Miscellaneous
The global agriculture industry has shown robust growth in the production of a number of commodities, including fish, dairy products, meat, and cereals. However, the growth in demand is expected to slow down as stock level of commodities such as cereals increases. This could cause agricultural commodity prices to stay at more or less the same levels. Nonetheless, increase in population growth is anticipated to strengthen food demand globally. Demand for animal feed is foreseen to see growth, especially in emerging economies such as China. Urbanization is expected to push the demand for convenience and processed food in developing countries. However, high consumption of oil and sugar through these foods could raise health concerns.
Countries that show aggressive population growth are prophesied to increase their import of basic foods. Intensification and efficiency benefits are foretold to support the rise in livestock and crop production. The MENA region faces food security concerns due to political instability and scarcity of resources. However, policies promoting grain consumption and production, alternative policy approaches, and improvements in agriculture and fish productivity are predicted to provide some relief to the region. Cereals such as wheat could be a key segment of the MENA agriculture industry.
Players to Build New Facilities or Upgrade Capabilities of Existing Ones
Cargill: In terms of revenue, it is the largest privately held corporation in the US. Founded in 1865, it is a leading global provider of agricultural, food, and other products and services. The US-based privately held global corporation announced in May 2019 that it will invest in Israeli cultured meat company Aleph Farms to meet future consumer demand for animal protein.
Tyson Foods: The American multinational food corporation is the second largest marketer and processor of pork, beef, and chicken in the world. In June 2019, it announced the opening of an off-the-grid standalone solar-powered poultry house in the US, built in partnership with Auburn University’s National Poultry Technology Center.
Archer Daniels Midland: The US-based global food processing and commodities trading corporation created a new business unit in May 2019. Combining the company’s Oilseed and Origination business operations, the Ag Services and Oilseeds business unit was created to accelerate value creation.
JBS USA: It is a leading processor of beef, pork, and prepared foods in the US and Canada. In February 2019, it announced a significant expansion of its Plumrose USA prepared foods business in Iowa. It made a $20 million investment in the facility to improve its bacon processing and slicing capabilities.
Alltech: It is a US animal feed, meat, brewing, and distilling operator that offers agricultural products for livestock and crop farming applications. In May 2019, it added non-protein nitrogen source Optigen to its line of Carbon Trust-accredited solutions. The new addition can help to reduce carbon footprint in the agriculture industry, according to the company’s press release.
Asia to Surpass North America and Europe with Higher Consumption of Fresh Dairy Products
According to the OECD-FAO Agricultural Outlook 2018-2027 report, the consumption of fresh dairy products in North America is expected to reach 25.28 million tonnes in 2027. In the same year, the region is forecast to consume 21.15 million tonnes of ready-to-cook poultry meat, 12.87 million tonnes of sugar, 10.43 million tonnes of fish, and 18.51 million tonnes of vegetable oils.
Europe’s consumption of fresh dairy products is projected to touch 74.63 million tonnes in 2027. The consumption of ready-to-cook poultry meat and sugar in the region is expected to reach 21.96 million tonnes and 26.83 million tonnes respectively. Furthermore, the region is foretold to consume 18.45 million tonnes of fish and 30.05 million tonnes of vegetable oils.
The developing region of Asia is expected to consume 330.24 million tonnes of fresh dairy products in 2027. In the same year, the region is projected to consume 57.70 million tonnes of ready-to-cook poultry meat and 99.68 million tonnes of sugar. Its fish and vegetable oils consumption is forecast to reach 134.10 million tonnes and 140.26 million tonnes respectively.
Four Major Trends of Global Agriculture Industry
Meat Consumption: A few years ago, the US was consuming meat at a higher rate than most countries in the world. However, there has been a shift in meat consumption in recent years, with China now taking the charge as it exhibits a stupendous rate. The country’s poultry and red meat consumption is expected to increase significantly in future. Furthermore, its pork import from the US is prophesied to increase in the next few years.
Crop Demand: It is predicted to remain less bullish in the coming years. The relationship between crop and energy prices has always been strong as demonstrated by several commodities. Improvement in the correlation between crude oil and corn prices in the last few decades is a good instance to take note of. Slow demand for biofuels could be one of the reasons that analysts are expecting crop demand to show less bullishness.
Data Analysis: There is no doubt technology will have its own place in the global agriculture industry. Smart farming techniques could be commonly used in the industry, with data analysis supporting or sometimes challenging the assumptions and intuitions of farmers. Weather data, soil maps, greenness sensors, and aerial satellite imagery are some of the popular technologies used in farming.
GMOs: The use of genetically-modified organisms (GMOs) could continue in the coming years, but with some public relations and political hindrances. Implementation of biotechnology strategies could be expensive because of government regulations such as compulsory labeling for GMO products. However, some countries such as China have started to gradually accept GMOs. Adoption of GMOs for domestic crops could help China to become a net exporter and maintain self-sufficiency.
Need for Agricultural Sustainability to Increase Demand for Agricultural Biologicals
Some of the leading sectors of the global agriculture industry are agricultural biologicals, seeds, irrigation, farm equipment, animal nutrition, feed, and agrochemicals. The global agricultural biologicals market is anticipated to obtain growth with increased promotion by government organizations, high demand for organic food, availability of favorable regulatory framework, and growing need for agricultural sustainability. Increasing use of animal feed, need to improve food production, and agricultural development could be key factors driving the global seeds market. Demand for agriculture equipment is foreseen to rise on the back of the improving adoption of modern farming techniques and technologies.
The global animal feed market is prognosticated to increase its growth as the demand for meat products sourced from poultry and livestock animals rises. Cereals have great nutritional value and are mostly consumed as part of a complete breakfast meal. Growing health concerns and the need to improve nutritional content of daily foods are prophesied to increase the demand for cereals in the coming years.
According to the OECD-FAO Agricultural Outlook 2018-2027 report:
● The world production of wheat is forecast to reach 832.62 million tonnes in 2027
● The world production of maize is projected to touch 1,201.71 million tonnes in 2027
● The world production of other coarse grains is expected to reach 326.88 million tonnes in 2027
● The world production of rice is predicted to touch 562.32 million tonnes
● The world production of distiller’s dry grains is anticipated to reach 58.00 million tonnes in 2027