LONG-TERM TRENDS IN
POPULATION, FOOD DEMAND,
AND COMMODITY PRICES
Douglas Southgate
Ohio State University
[email protected]
Overview of Presentation
•
After unprecedented expansion from 1950 to 2000,
population growth is decelerating and might even stop
a few decades from now.
•
But food demand is still increasing rapidly, largely
because per-capita consumption is rising along with
living standards in Asia, Latin America, etc.
•
Food supplies have gone up faster than demand,
thereby bringing down prices. Supply growth is mainly
the result of higher yields resulting from technological
improvement, not expanded agricultural land use.
•
These trends can continue, and probably will, but there
are no guarantees.
Global Population, 1800-2050
12
10.46
Population (millions)
10
9.15
8
6.83
6
7.96
6.06
4
4.07
2.47
2
0.98
0
1800
1
1.26
1850
2
1.65
1900
3
1950
4
Year
2000
5
2050
6
7
Changes in Human Fertility
Births per woman in:
1982
2007
USA (301 million)
1.8
2.1
Germany (82 million)
1.4
1.4
Russia (142 million)
2.0
1.4
Fertility Revolution in Asia
Births per woman in:
1982
2007
China (1,318 million)
2.3
1.7
Thailand (67 million)
2.9
1.8
Indonesia (226 million)
4.1
2.2
India (1,125 million)
4.5
2.7
Bangladesh (158 million)
5.9
2.4
Fertility Revolution Elsewhere
Births per woman in:
1982
2007
Mexico (105 million)
4.2
2.1
Brazil (190 million)
3.8
1.9
Iran (71 million)
6.6
2.0
Egypt (80 million)
5.5
2.9
Nigeria (148 million)
6.9
5.3
Living Standards and Diets
Sugar,
Edible
Oils,
etc.
Fresh
Fruit and
Vegetables
Living
Standards
Livestock
Products
Cereals and
Other Carbohydrates
Plant Proteins
(beans, lentils, etc.)
Quantity of Food Consumed
Average Annual Growth in
GDP per Capita (percent)
Region (2007 GDP p.c.,
PPP-adj. in 2005 dollars)
1965-99
2000-07
High-Income Nations ($36,341)
2.4
1.7
E & SE Asia ($4,969)
5.6
8.0
S Asia ($2,532)
2.4
5.5
Lat Am & Caribbean ($9,678)
1.4
2.1
Mideast & N Africa ($7,402)
0.1
3.2
E Eur & former USSR ($11,262)
0.0
6.1
Sub-Saharan Africa ($1,870)
-0.2
2.8
Growth in Food Demand,
2009 to 2050
Population
in 2050
(billions)
Annual Growth
in per-capita
Food Consumption,
2009-2050 (%)
Total Growth
in Food Demand,
2009-2050 (%)
7.96
0.2
27
9.15
0.3
52
10.46
0.3
73
Global Supply Trends
• Average cereal yields have more than doubled since
the early 1960s.
• Increases in farmed area have been relatively
modest: 7.4% increase in cereal area and 10.7%
expansion in total agricultural land use between
1961 and 2007.
• Thanks mainly to yield growth, food supplies have
increased faster than population and food demand –
during a period when human numbers and food
consumption were going up at unprecedented rates!
Growth in Global Cereal Yields
4.0
Metric tons per hectare
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1960
1970
1980
1990
Year
2000
2010
Long-Term Trend Toward
Diminished Food Scarcity
• Increased per-capita production in Asia (98 percent
between early 1960s and 2007) and South America (73
percent), but not in Sub-Saharan Africa (-2 percent).
• Real prices of grain (which accounts for more than
three-fifths of total food consumption if livestock feed is
considered) declined by 75 percent between 1950 and
middle 1980s.
Real Grain Prices (2000 $), 1950 to 2008
1000
800
$ (2000)/mt
Rice
600
400
200
Wheat
Corn
0
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Year
Reasons for Recent Price Spikes
•
On the supply side, higher fossil-fuel prices have raised costs of
fertilizer, diesel, and other inputs.
•
Also, the lack of supply response in places like Argentina and Ukraine,
where export restrictions were adopted to keep food cheap for urban
consumers, pushed up international prices.
•
On the demand side, population growth has been decelerating and
recent gains in per-capita consumption (explained by improved living
standards) have been in line with previous trends.
•
A more important source of demand growth has been biofuel
development – in particular, the manufacture of ethanol from corn in
the U.S.A., which is the leading exporter of this commodity.
Long-Term Price Trends
•
Growth in food demand between 2009 and 2050 will be
driven by increases in population (6.83 billion in 2000)
and incomes, which influence per-capita consumption.
•
If there is no increase in agricultural land use and if
yields continue to follow the path of recent decades, food
supplies will increase by 52 percent between 2009 and
2050.
•
Assume that (due to low elasticities of demand and
supply) a 1-percent difference between demand growth
and supply growth causes a 2 percent change in price.
Demand and Price Trends,
2000 to 2050
Population
in 2050
(billions)
Annual Growth in
per-capita Food
Consumption,
2000-2050 (%)
Total Growth
in Food
Demand,
2000-2050 (%)
Total Change
in
Food Prices,
2000-2050 (%)
7.96
0.2
27
-50
9.15
0.3
52
0
10.46
0.3
73
42
Can Yields Keep Growing?
• Some (e.g., environmentalist Lester Brown)
contend that biological limits on yields are being
reached, but others (e.g., Danish statistician Bjorn
Lomborg) have refuted this claim.
• Future yield growth will depend on:
– additional irrigation development;
– advances resulting from agricultural
–
biotechnology;
and
support for agricultural R&D.
Recapping . . .
•
Human numbers and food demand grew at
unprecedented rates from 1950 to 2000.
•
But increases in food demand did not result in as much
expansion of agricultural land use.
•
Nevertheless, food supplies grew faster than food
demand, mainly because technological improvement
raised yields (tons/hectare).
•
In light of the economy-wide benefits of diminished
food scarcity have been enormous, we must ask if food
will stay cheap.
•
Is per-capita consumption of dairy products in Asia the
same as, or lower than, levels elsewhere in the world?
“It’s all in the book”
…Casey Stengel
D. Southgate, D. Graham, and L. Tweeten,
The World Food Economy
(Malden, MA: Wiley-Blackwell, 2007).
Available on Amazon.com,
hard-cover as well as paperback.