by Professor Ross Kingwell – AEGIC Chief Economist.
Let’s start our global story by first looking in our own backyard, Australia. Australian agriculture, as our national anthem suggests, was based on “boundless plains to share”. Those plains were used by waves of European settlers to produce sheep, wool and cattle. Gradually, cropping also featured in regions with suitable soils and rainfall.
So, generations of Australians grew up with ample access to sheep meat and beef. The affordability of red meats meant that until very recent decades, the average diet of most Australians comprised large servings of sheep meat and beef. By illustration compare the situation in 1975 versus 2018 (Table 1).
Table 1: Meat and fish per capita consumption in Australia in 1975 and 2018
The change in the meat composition of Australians’ diets has been dramatic, as discussed in a previous blog (see Blog 31 – The meat in our sandwich). But what about other nations? Is the same dietary shift away from red meat occurring? Figure 1 displays the dietary change in a few key countries.
Figure 1: Changes in per capita meat and fish consumption in various countries from 1998 to 2018 Source: Whitnall and Pitts (2019)
Among the countries in Figure 1, Australia is unique firstly in its high initial consumption of sheep meat and secondly its strong switch away from sheep meat and beef consumption. The USA and Japan have also switched away from beef consumption but to a far lesser degree, whilst China and Indonesia have slightly increased their beef consumption. Japan is unique in reducing its per capita consumption of fish. China and Indonesia have increased their per capita consumption of all meat types and especially fish.
So what does all this mean for Australia’s grains industry? Firstly, it means that overall, per capita consumption of meat and fish is growing, especially in countries like China and Indonesia whose populations are still growing by the millions each year. The twin combination of growing populations and increasing per capita consumption of meat and fish is fuelling a growing demand for feed grains. Increasingly meat and fish production depends on feed grains.
Even meats like beef and sheep meat, often produced in extensive pastoral or grazing settings, are increasingly reliant on these animals being grain-finished. The switch into increased consumption of poultry, pork and farmed fish, depends on access to feed grains.
The good news for Australia is that this burgeoning demand for feed grains is on its doorstep in nearby countries like Indonesia and China. Australian grain producers can potentially benefit from the twin growth in demand for grains, as food and feed.
As an aside, noting the current topicality of climate change discussion and Australia’s need to reduce greenhouse gas emissions, it’s worth highlighting that there are far fewer sheep and cattle in Australia now than in 1975. Dare I point out that the more important source of emissions has been Australia’s doubling of its human population since 1975, not its methane- producing sheep and cattle! Although, cattle and sheep might attract the ire of some environmentalists, the numbers of these animals in Australia have decreased since 1975. It’s the humans in Australia that have doubled their numbers!
The global taste for meat and fish is changing. It’s a good news story for Australia’s grains industry, as much of the prospective increased demand for feed grains, required for meat and fish production, is on Australia’s doorstep.
Whitnall, T. and Pitts, N. (2019) Global trends in meat consumption . ABARES Agricultural Commodities march 2019, pp.96-99.