Livestock Feed Will Surpass Human Consumption and Biofuel to Drive Grain Demand

Over the next decade, livestock feed will overtake human consumption and biofuel demand to drive growth in grain demand, according to a report from the UN Food and Agriculture Organization (FAO) and the Organization for Economic Co-Operation and Development (OECD).

Over the past ten years livestock feed has accounted for 36% of the growth in grain consumption, however over the next ten years, livestock feed demand will account for approximately 70%, according to the yearly OECD-FAO agricultural outlook.

Due to this increase, global use of grains is projected to increase by 16% to 2.8 billion tons with coarse grain mostly used for animal feed and biofuels collectively accounting for half the growth. Human consumption of grains has been falling, particularly in developed countries where human grain consumption accounted for 10% of overall grain use between 2012 and 2014, while in developing counties grains accounted for 60%.

Lower crude oil prices and lower demand for fuel are expected to curb demand growth for biofuels, especially in the U.S. and the EU, however meat demand will remain high, particularly for pork and poultry.

Growth in meat production over the next ten years is expected to be 17% as rising incomes and more dietary choices in developing countries supports demand. The rising demand for animal feed to support this growth will have a noted effect upon soybean demand which is forecast to rise 20% over the coming decade.