Todd's Take

Going over last week's Livestock, Dairy and Poultry Outlook, I noticed an interesting chart that showed USDA's expectation for an 11% increase in net exports of U.S. red meat and poultry in 2017. Not bad, was my first thought, especially for the increased grain demand that will be needed for feed.

It also hit me that it was just one year ago this month the World Bank announced the number of people living in extreme poverty was likely to fall below 10% for the first time in history -- something I wrote about in "A Modern Miracle" on Oct. 13, 2015. Because poultry is the one meat that is both affordable and broadly acceptable, I thought it would be interesting to look at world poultry demand as a marker of declining poverty.

Thanks to the Organization for Economic Co-operation and Development's (OECD's) interactive table of meat consumption data, I was able to learn much about poultry demand that confirmed the kind of changes the World Bank was talking about.*

According to OECD, world poultry demand has increased 37% the past 10 years and is expected to increase 2% in 2017. That may not sound wildly bullish, but consider that world pork demand was up 17% the past 10 years while the population grew 12% and beef demand was up 9%. Poultry's details get more interesting.

It was not surprising to find that China is the world's largest consumer of poultry as 19% of the world's population is expected to consume 16% of the total in 2016. However if you thought, like I did, that China probably also led the pace of consumption growth over the past 10 years, we would be wrong.

The two places on the planet where poultry consumption has grown the fastest over the past 10 years and are expected to rise again in 2017 are India and Sub-Saharan Africa. Home to roughly 2.25 billion people and 32% of the world's population, these two regions consume just 4% of the world's poultry, but that is changing.

According to OECD, poultry consumption increased 73% in Sub-Saharan Africa and 68% in India over the past 10 years, nearly twice the world's average pace as extreme poverty has been declining just as the World Bank described a year ago.

In 2017, OECD expects poultry consumption to increase 7.4% in Sub-Saharan Africa and 3.3% in India. While their totals are still relatively small, both regions are persistently moving up the rankings as India is now the seventh-largest consumer of poultry in the world and Sub-Saharan Africa comes in eighth.

China's impact on grain markets has been largely bullish the past 10 years and world soybean production is still struggling to keep pace with China's rising prosperity. It will take time, but the way things are going, India and Africa represent two new Chinas on the way with bullish ramifications for future grain demand, especially protein-rich soybeans.

Given the skimpy ending supplies of soybeans the world saw in 2015-16 after three years of good growing weather, it's hard to imagine where all those new soybeans will come from.

* Latest OECD Meat Consumption data found at:

http://bit.ly/… or https://data.oecd.org/…

Todd Hultman can be reached at todd.hultman@dtn.com

Follow him on Twitter @ToddHultman1

(CZ/SK)

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