Editor’s Note: Huston Keith reports from the 2013 Annual Meat Conference on “Making Safe, Affordable, and Abundant Food a Global Reality,” a presentation given by Jeff Simmons, president of Elanco.
Despite drought and other recent problems plaguing the meat industry, Jeff Simmons, president of Elanco, believes the meat industry can capitalize on enormous opportunities in the world economy.
The middle class will add 3 billion people by 2030, projects OECD analyst Homi Kharas, more than doubling to nearly 5 billion. Asia Pacific will lead, growing from half a billion now to over three billion by 2030 — more than 10 times the middle-class population of the United States. The United Nations estimates total world population will grow from 7 billion to 9 billion by 2050.
The middle-class surge is especially beneficial to meat, milk and eggs. Simmons notes that as people attain this level of income, they add animal proteins to their diet for the first time. Combined with the overall population growth, he projects that by 2050, the world will need twice as much food as it does now.
Massive food-production increases
This enormous growth of food production, however, will not be easy. The amount of land available for agriculture will increase only 20 percent, according to the United Nations. However, the United States has achieved these productivity gains before. In the 60 years up to 2008, agricultural production increased 250 percent with very little additional land and other resources.
This productivity growth occurred by application of technology — improvements in animal nutrition, health care, genetics, etc., all played vital roles. However, Simmons warned that we need to ensure that agricultural producers have full access to safe technologies. As an example, he noted that the United Kingdom agriculture was fettered by European Union technology restrictions. The result was a huge loss in farm workers and incomes, and a dramatic increase in meat and dairy imports.
Another concern is the egg-production decline in the U.S. of 1.5 per hen per year since 2000. While due to a combination of factors — disease, laws, regulations and lack of innovation — failing to reverse the trend will require 7 billion more chickens in 2050 than otherwise. The additional land and resources may be impossible to obtain.
This growth still is likely to benefit the United States, Brazil, Argentina and other efficient agricultural producers, as long as trade is free. Brazil transitioned from a food importer in one generation to become the world’s largest exporter of beef, poultry and sugar cane. Argentina is targeting specific technologies to increase its production over 60 percent over the next decade.
The most important benefit of enhanced productivity is to address world hunger, says Simmons. According to the World Bank, more people than not have great difficulty or are unable to obtain adequate nutritious food.
Consumer preferences hold the key
Taste, cost and nutrition are the primary reasons for choosing food for 95 percent of U.S. consumers, according to surveys of 26,653 consumers by Nielsen.
Similar results are shown by additional surveys of 40,000 consumers worldwide. Although interest in natural and organic foods has grown, it is important for only 5 percent of consumers. And those who want to require such a thing for all consumers total only 1 percent — thus they should not be allowed set rules to restrict technology arbitrarily.
Simmons believes the meat industry and its partners must use innovation to its fullest extent to supply consumers the food they need and want worldwide.