World Grain - November 2016 - 6

FROM THE EDITOR-IN-CHIEF

New model improves
food outlook

s part of an effort to predict the future of the food supply and demand
in 76 low- and middle-income countries that currently have large populations
deemed food insecure, the Economic Research Service (ERS) of the U.S. Department
of Agriculture has devised a model pointing
to countries and areas that are likely to enjoy fairly large increases in consumption
of grain-based foods. The new study, titled
"International Food Security Assessment,
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a different approach to forecasting food demand in 2026. The new data approach stems
from analyzing the way expected declines
in food prices over the next decade combine
with likely income and population gains
to estimate food consumption. This model
points to a much more optimistic pattern in
2026 than shown by previous analysis relying on supply forecasts.
The new model projects food consumption in terms of demand measured for each
of 76 low- and middle-income countries.
The food shortfall in each is measured by
the grain-equivalence of a shortfall from a
nutritional target of 2,100 calories per day. It
is that shortfall, which is estimated in terms
of grain that may be converted into grainEDVHGIRRGVOLNHÀRXU(DFKFRXQWU\¶VIRRG
security is measured for 2016 and for 2026,
showing the gap between projected consumption (in this case food demand) and the
nutritional target. The 2,100 calories considered necessary to sustain life at a moderate
level of activity is the average rate in developed nations.
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optimistic," based solely on strong income
growth and slightly lower food prices. Such
a description stems from the numbers alone,
especially what is called Implied Additional
Supply Required (IASR). For all 76 countries in the new study, the IASR in 2016
is estimated at 154 million tonnes in grain
equivalent, compared with the supply model
estimate of 150 million and actual imports
of 145 million. Those imports would more
than double to keep pace with the IASR of

329 million tonnes projected for 2026. The
study says production will barely keep up
with population growth and that demand
expansion due to lower food prices and
higher incomes will have to be met from
outside sources.
Regional expectations based on the demand model are revealing. Asia accounts for
a large part of the increase; its demand model IASR in 2016 of 59 million tonnes is projected to grow to 165 million in 2026. SubSaharan Africa faces a shortfall of 34 million
this year that will become 72 million a decade ahead. Latin American and Caribbean
countries have a current IASR of 19 million
tonnes, which is projected to grow to 28 million in 10 years. North Africa is assigned an
IASR in 2016 of 42 million tonnes, which is
forecast to grow to 67 million in 2026.
It should be no surprise that the ERS
stresses that the difference between projected food production and demand "must not
be interpreted as projected imports." This is
explained by noting that demand forecasts
are not linked to food supply projections to
create a closed system. "This means," the
ERS wisely says, "there is no equilibrium
price that could induce supply to increase or
demand to decrease." It adds that this shortcoming may be addressed in future models.
Keeping that warning in mind, it is still
helpful to see how the model indicates demand changes in the next 10 years. Its elements, especially the income outlook, bring
current bright forecasts of global income
trends into its role as a force in consumption.
The earlier supply-oriented model does not
foresee as favorable an outcome for the nations involved or for industries like milling
that strive to be in the forefront of solving
the global quandary forcing millions to subVLVWRQLQDGHTXDWHGLHWV7KUHH(56RI¿FLDOV
are credited for the new model - Stacey
Rosen, Karen Thome and Birgit Meade -
DQGWKH\GHVHUYHWKHJUDLQLQGXVWU\¶VWKDQNV
for this important work.
Morton I. Sosland
Editor-in-chief

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