According to USDA’s baseline projections, developing countries will account for much of the increase in projected growth in global consumption of meats and crops in 2013-22, write Ronald Trostle and Ralph Seeley.
The developing-country shares of the projected growth include 81 per cent for meat, 83 per cent for grains and oilseeds, and 95 per cent for cotton. Furthermore, developing countries’ demand for agricultural products is expected to increase faster than their production. As a result, these countries will account for 92 per cent of the total increase in world meat imports, 92 per cent of the increase in total grains and oil seeds imports, and nearly all of the increase in world cotton imports.
Factors behind the rapid increase in developing countries’ demand are high rates of population and income growth, accompanied by increased urbanization and an expanding middle class. Populations in developing countries, in contrast to those in high-income countries, tend to be younger and undergoing more rapid urbanization, which generally leads to more diversified diets. These consumption changes are expected to shift import demand from traditional staples toward feedstuffs and high-value food products.
Rising import demand by developing countries will provide an opportunity for the United States to expand agricultural exports. However, US exporters will face new challenges as they adapt in response to the import needs of a large number of small but rapidly growing markets.
Economic and Population Growth Stimulate Demand for Agricultural Products
The macroeconomic assumptions underlying USDA’s long-term projections reflect a dichotomy between relatively weak long-run sustainable growth in developed countries and relatively strong, above-average growth in developing countries. As a result, developing countries are projected to become a larger part of the world economy.
Gross Domestic Product (GDP) worldwide is projected to increase at an average annual rate of around 3.3 per cent over the next decade. In developing countries, the projected growth rate is 5.6 per cent per year. The developing-country share of global real GDP is expected to climb from 33 per cent in 2010 to 42 per cent by 2022. Robust economic growth is anticipated across most developing countries in Asia, the Middle East, Africa, and Latin America. China and India are expected to remain among the world’s fastest growing economies, each averaging more than 7 per cent a year.