Presentation by Derek Baker at the South African National Beef and Sheep Conference, Pretoria, South Africa, 21 June 2012.

1. African beef and sheep markets:
situation and drivers
Derek Baker
International Livestock Research Institute
South African National Beef and Sheep Conference, Pretoria,
South Africa, 21 June 2012

2. Outline
1. Basic quantities, projections
2. The nature of sheep and beef markets
3. Drivers of change
4. Opportunities and challenges faced
… emphasis on developing countries in Africa

3. Numbers of animals
Sheep numbers
100%
90%
80%
70% Other
Oceania
60%
Global sheep (2010) 1.1 billion 50%
Europe
Asia
40%
(7% decline in 20 years) 30%
C + S America
N America
20%
Africa
10%
0%
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Cattle numbers
100%
90%
80%
Other
70%
Oceania
60%
Europe
50%
Global cattle (2010) 1.4 billion 40% Asia
30% Cent + S America
(9% increase in 20 years) 20% Nth America
10% Africa
0%
FAO, 2012
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010

4. Consumption numbers: a World view
Demand: increasing
in the developing world
The 4 billion people living
on less than $10 a day
constitute a food market of
US$ 2.9 trillion per year.
(Hammond et al 2007).
Rosegrant et al. 2009
Based original figure by IFPR/John McDermott 2012.

5. Recent consumption change: 1982-2008 disaggregated by region
Developing
Develped
Global meat consumption more than
doubled (129=>285 MT).
Other
Of the more than 150 MT increase,
Europe Asia accounted for 100 MT.
North America African consumption increased
less than 10 MT
Latin America
Asia
Africa
-50 0 50 100 150
Million metric tons of meat
FAO, 2009

6. Consumption per capita: 1990-2008
African consumption per capita has increased far more slowly than in the
rest of the world
Per capita Meat Consumption, in Selected Countries in Africa and the World, 1990 and 2008
Beef Pigmeat Poultry Total
Kg/caput
1990 2008 1990 2008 1990 2008 1990 2008
Uganda 4.7 3.5 3.3 2.8 1.7 1.6 12.0 9.6
Chad 12.6 8.7 0.6 0.5 2.9 3.9
Ethiopia 4.9 4.5 0.0 0.0 0.8 0.7 9.5 8.4
Tanzania 7.3 6.1 0.3 0.4 1.0 1.3 10.3 9.3
Malawi 1.8 1.2 1.1 2.0 1.2 1.3 4.5 5.0
Mozambique 3.1 2.1 0.9 0.7 2.1 3.0 2.1 3.0
Niger 3.7 2.9 0.2 0.1 2.8 2.2 2.8 2.2
Nigeria 2.4 2.1 1.2 1.6 2.0 1.7 2.0 1.7
Africa 6.5 6.6 1.0 1.0 3.3 4.9 13.8 15.6
Developed 27.4 27.6 29.1 28.4 19.7 28.4 79.8 81.9
Developing 5.2 6.5 8.3 12.0 3.6 10.1 18.7 31.5
World 11.3 11.0 13.6 15.1 7.7 13.9 34.3 42.1

7. World trade in meat: Africa’s role
NET MEAT TRADE STATUS, 2008
Developing
Develped
Key Importing Regions:
Other
Oceania Asia: 40% imports
Europe: 22% imports
Europe
N. America: 10%
North America Africa: 1%
Latin America Key Exporting Regions:
Asia
N. America: 30%
Africa
Latin America: 30%
-10 -8 -6 -4 -2 0 2 4 6 8
Europe: 13%
Oceania: 12%
Africa: 1%
Million metric tons
FAO, 2009

8. African demand and consumption: looking to the future
• By 2050 Africa is estimated
to become the largest world’s
market in terms of pop: 27%
of world’s population.
• Africa’s consumption of
meat, milk and eggs will
increase to 12, 15 and
11% resp. of global total
FAO, 2009

9. Changing African meat consumption: 2005 – 2030 – 2050
Projected % shares of projected total meat consumption
2005 / 07
0.19 less beef
0.46
0.11
BEEF 2030
MUTT 0.23
PIGM 0.24
0.43
POUL
0.12 2050
0.21
0.28
0.40
0.13 0.19
more poultry
FAO, 2009

10. Consumption: demand and markets
Demand: willingness to pay for meat products’ quality and safety
Kenya: WTP for beef attributes
Premium Ethiopia: % of consumers WTP a
Attribute (USD/kg)* price premium for beef attributes
Official inspection stamp 1.42 Low Middle High
Cleanness of the meat 1.12 income income Income
Soft texture 1.00 Safety 53% 63% 81%
Low fat cover 0.62 Good quality 51% 64% 83%
* approx, due to exchange rate change
Jabbar et al. 2011
Based original figure by IFPR/John McDermott 2012.

11. Public health in informal markets
Food safety: informal markets are
often beyond the reach of regulation

12. Land use
The changing nature of livestock systems
W. Africa 1966 – pastoral system
W. Africa 2004 – crop-livestock system
Mixed systems in
developing countries
produce ca. 50% of the
World’s cereals Courtesy of B. Gerard

13. Feeds
Projected increases in African livestock
numbers often fail to take account of feed
constraints.
Extensive grazing/pastoral systems have
probably reached their carrying capacities.
• Monogastric species: grains + spec. feeds
• Dairy: fodder crops + crop residues + by-
products
• Ruminants: some crop residues + grazing
(often communal + public + other)

14. African marketing systems: in general…
• Low off-take rates
o Multiple uses of livestock
o Crop-livestock interactions
o Low productivity
o Lack of information
o Risk management
o High transaction costs
• Lack quality standards at all levels
• Smallholder dominated
• Informal
• Lack vertical co-ordination
o Payment
o Quality and quantity/timing/inputs
• Beef + dairy interaction
• Complex seasonality

15. Co-ordination - 1
Allocation of animal health tasks/actions
% of each actor group reporting use of
100%
each animal health product/service
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Vaccines Dips Anti-worm Treatments Other
producer co-operative feedlot butcher
Source: ILRI beef VC survey in Ethiopia

16. Co-ordination - 2
Seasonality in sales and purchases
100%
% of all sales/purchases that are
90%
wet season sales/purchases
80%
70%
60%
Bulls
50% Cows
40% Heifers
30% Ox
20%
10%
0%
producer trader feedlot butcher
sales purchases purchases purchases
Source: ILRI beef VC survey in Ethiopia

17. Co-ordination - 3
What “the buyer” wants
3
Scores of threemost-cited
2
attributres
1
0
producer trader feedlots meat retail broker co-ops
plant
Breed and colour Age Length or size Health
Condition Ability to plough Place of origin
Source: ILRI beef VC survey in Ethiopia

18. Opportunities
• Raising productivity
o Breeds
o Feeds
o Animal Health
o Training, knowledge/extension
• Exploiting consumer demand elements
o Specific safety/quality attributes
o Lifestyle and convenience, ethnic markets
o Population growth
o Regional trade
• Value chain cost efficiencies
o Scale and scope, esp. via structure
o Co-ordination, transaction mechanisms
o Storage and transport
• Rural services
o Financial
o Technical
o Risk management

19. Challenges
• Appropriate breeds
• Feed
• Environmental carrying capacity
• Access to land, water
• Market structures
• Barriers to market entry (all levels)
• Identifying and serving high WTP
• Understanding consumption trends:
population vs per capita vs WTP
• Competition from imports

20. Research tasks
• Productivity
o Animal health
o Breeding
o Genomics
o Feeds and feeding
o Access to inputs
• Environment and climate change
• Human health and nutrition
• Market participation
• Whole-chain approach
o Co-ordination around quality and quantity
o Identifying smallholder/commercial synergies
o Incentive-based change
o Seasonality
o Commodity-based trade
• Policy environment

21. Contact: Derek Baker d.baker@cgiar.org
International Livestock Research Institute www.ilri.org