The Council on Food, Agricultural & Resource Economics (C-FARE), in conjunction with the U.S. Department of Agriculture (USDA) Economist Group and the American Feed Industry Association today hosted “Future Feed Patterns for U.S. Livestock and Poultry” at the USDA headquarters in Washington, D.C. The seminar featured Joel G. Newman, AFIA president and CEO, Dr. Harry Baumes, director of the Office of Energy Policy and New Uses, USDA Office of the Chief Economist and Dr. Jennifer Bond, research economist, Crops Branch, Markets and Trade Economics Division, USDA Economic Research Service (ERS).
Newman presented on the study Future Patterns of U.S. Feed Grains, Biofuels, and Livestock and Poultry Feeding, a project financed by the Institute for Feed Education & Research (IFEEDER) on behalf of AFIA and C-FARE. The report, which was released in July 2012, addresses the factors driving the cost of livestock and poultry production and how food, feed and fuel resources will be allocated as we strive to feed a growing global population.
A number of factors impact feed availability and cost, namely: biofuels, annual reserves and global demand. “You cannot talk exports without discussing China,” Newman said when explaining how the increase in China’s middle class correlated to the country’s increased demand for protein.
This demand is putting pressure on an already strained U.S. food system, which has suffered significant crop reduction due in part to this year’s historic drought which impacted the cost and availability of corn supplies. “This would have been the perfect year to waive the ethanol blending mandate under the Renewable Fuels Standard (RFS), which was unfortunately denied by the EPA.” Newman continued, “This is not a price-related issue, but an issue of equal access to the available supplies that are out there.”
Dr. Baumes, USDA, presented on feedstocks and biofuels. He explained about an existing mandate where no more than 15 billion gallons of corn starch can be used to meet the RFS. According to him, although challenges exist, they are being addressed and significant strides are being made to use alternative resources apart from feed, including algae, woody biomass, switch grass and municipal solid waste. “The U.S. can produce and meet food, fiber and fuel needs,” stated Baumes.
China is the world’s largest pork market constituting almost half of global production (49.6 percent). Dr. Jennifer Bond, USDA ERS, stated the number is expected to increase to 53.7 percent in the next decade. Although the price of corn is higher in China than in the U.S. which saw record high prices this year, the country is a major corn importer, with 3.15 percent of the total global imports. This is a major contributor to U.S. demand.
Despite the challenges and constraints, Newman stated, “The U.S. agricultural system is the envy of the world."