Population & Economics Propel Demand
Unfortunately, producers and consumers must worry about more than current reality.
The global population today is 7.1 billion; it’s expected to peak at 8.5-9.5 billion by 2050. Various analysts suggest the world’s food supply must double in the next 40-50 years in order to keep up with the demands of the growing population.
“The demand for animal protein in the next 38 years is anticipated to increase significantly,” according to the NIAA white paper. “Economists estimate that by the year 2050, global meat production must increase by 73 percent to meet the expected 43 percent boost to the world’s population. Three other basic factors driving global demand for animal protein are economic growth and income, the rising middle class of countries, particularly China and India, and urbanization. Broken down by species, to meet anticipated animal protein demand, global poultry production will need to increase by 125 percent, followed by sheep and goat meat at 78 percent; beef at 58 percent; and pork at 37 percent.”
Keep in mind that 925 million people in the world were undernourished in 2010, according to World Hunger Education Services (WHES). That’s about 13 percent of the global population or about one out of every seven people.
Though it’s true that many of the world’s hungry live in undeveloped and developing countries, plenty of folks go hungry in the U.S., too. According to WHES, 17.2 million U.S. households were undernourished in 2010, or about 14.5 percent of households.
So, even as economics have some questioning their survival in the beef cattle business, the need for current and increased production has never been more urgent.
“While the United States has a reputation for providing safe, affordable food and will be a major player in helping provide animal protein to meet this growing global demand, economists maintain that the answer is not only intensification of production,” say authors of the NIAA white paper. “Achieving anticipated increased demand for animal protein by producing twice as many poultry, 80 percent more ruminants, 60 percent more cattle and 40 percent more pigs using the same level of natural resources is unrealistic.”
Efficiency Must Increase
Amid the challenges imposed, experts contributing to the NIAA paper explain U.S. agriculture—already the most efficient in the world—must become even more so.
For perspective, according to The Changing Organization of U.S. Farming from USDA’s Economic Research Service, “Use of two major inputs, land and labor, has decreased over time. From 1982 to 2007, land used in agriculture dropped from 54 percent to 51 percent of total U.S. land area, while farming used 30 percent less hired labor and 40 percent less operator labor. Meanwhile, new technologies (such as precision agriculture), often requiring new or advanced management techniques, have been increasingly adopted by farmers.”
Looking ahead, the NIAA white paper authors say, “One economist maintains that 70 percent of the anticipated needed food supply will have to come from advancements in efficiency improving technology: practices, products and genetics. For example, in the beef industry, technology has resulted in each pound of beef produced in the United States in 2007 requiring 14 percent less water and 34 percent less land than in 1977.”
While that’s true, it’s also a fact that much of the increased production with fewer cows the last several decades as been largely the result of post-weaning technologies aimed at increasing weight gain and ultimately carcass weights.
Stan Bevers, an agricultural economist with Texas AgriLife pointed out a couple of years back that key measures of cow productivity, as measured by decades of Southwest Standardized Performance Analysis data, remained static or declined. These measures include average calf weaning weight, annual calving rate and average pounds weaned per cow exposed.
One of the basic reproductive technologies available to cow-calf producers, one that continues to gather dust, is heterosis, especially the maternal heterosis developed through managed, complimentary crossbreeding.
Crossbred cows remain in the herd 1.3 years longer than their straightbred counterparts and yield 30 percent more lifetime productivity. Crossbred cows have crossbred calves that serve up 10-20 percent more weaning weight than their straightbred peers. Those are just some of the benefits.
Moreover, for all of the strides that have been made for assessing and rewarding added value in the marketplace, arguably, pounds gained and marketed continue to drive the profit equation at all production levels.