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African beef and sheep markets: Situation and drivers

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African beef and sheep markets: Situation and drivers

  1. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 11. Public health in informal markets Food safety: informal markets are often beyond the reach of regulation
  12. 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. 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. 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. 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. 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. 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. 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. 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. 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. 21. Contact: Derek Baker d.baker@cgiar.org International Livestock Research Institute www.ilri.org

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