The poultry sector could become a bigger player as the global farming sector enters a new era where demand threatens to outstrip supply, according to a key economist.
Cranfield University economist Sean Rickard said that the big rise in feed prices in 2007 and subsequent food inflation had led to a change of thinking. “It brought it home to ministers that the world food supply is not as secure as they thought.
“It has rumbled those advising the government with the wrong view that going back to the old ways of farming was the way forward,” he said at the Egg and Poultry Industry Conference.
For 25 years up to 2006, food was becoming more affordable due to increasing incomes and falling world prices. But the trend sharply reversed in 2007 and affordability is now back at 1999 levels.
Demand for cereals is set to double by 2050. To meet this demand, farming has to increase production against a backdrop of increased energy prices and increasing constraints on water availability.
Food inflation is now falling on the back of two record global harvests, but going forward he highlighted forecasts from both the FAO and OECD predicting that cereal prices will remain significantly higher, probably higher than the peak seen in 2007.
“Therefore, the key message is that agriculture is entering a new era where demand is threatening to outstrip supply.”
He sees the poultry sector as being a key player with the potential to grow. “It has advantages over other farming sectors being a much more efficient user of energy and grain.”