A perspective on world grain demand

October 24, 2012 • Farming Practices, Daily Email Recap

A perspective on world grain demand

See: http://www.agprofessional.com/news/A-perspective-on-world-grain-demand-175154721.html

There are at least three components that make up the growth in world grain demand. One is the change in population. Assuming that the amount of grain consumer per person holds steady, the increase in total grain demand coincides with the increase in the number of people. The second is the amount consumed by each person. This growth is often related to income as people with higher incomes tend to consume more grain, either directly or through the production and consumption of livestock products. And thirdly, at least in recent years, there is the use of grain to produce fuels. The increase in ethanol production in the U.S. over the last decade is a clear example of this growth factor. It may be useful to evaluate how these factors have changed over the years so we can make some sense of future demand growth.

World population growth has slowed significantly. The rate of increase was about 1.6% per year in the early 1990s, slowing to 1.25% in the early 2000s and is currently near 1.12%. By 2020 the rate of growth is expected to drop below 1 percent per year, according to the United Nations Population Bureau. The world still adds about 78 million people per year, but in the early 1990s that figure was close to 88 million. The population growth rate is still very high in Africa, near 2.3 % per year, but population growth in near zero in many developed countries and is actually negative in Japan. The current yearly increase in population adds about 25 million tonnes to world grain demand.

It is a little harder to pin down changes in world per capita grain consumption. World per capita grain consumption in 2012/13 works out to 714 pounds. The tight supplies and high prices this year are causing a reduction  in per capita consumption from 723 pounds in 2011/12. The per capita calculation just takes total consumption and divides it by population. There is no way to separate out the amount of grain consumed directly, the amount consumed through livestock, and the amount used for other non-food products, such as ethanol, etc.

There are huge differences in per capita consumption among the countries and regions. For example, per capita consumption in India, most of which is consumed directly, is about 380 pounds. Compare that to U.S. per capita consumption of nearly 2,300 pounds, with very little direct consumption. World per capita grain consumption increased by roughly 6 percent over the last decade. Putting the annual increase at about 0.6 percent, boosting world grain demand by about 13 million tonnes.

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