Changes in the structure of global food demand

A clear understanding of what may happen to food demand, and its composition, is necessary to appreciate potential changes in the global food economy. The objective of this article is to project the pattern of global food demand in 2020. To achieve this objective, two goals are set. The first goal is to estimate the response of aggregate food and disaggregate food product demand to expenditure changes across the development spectrum. The second goal is to use the estimated models to project the structure of food demand patterns for selected countries in 2020. Results suggest that food expenditure will increase by 2020 but food's share of total expenditure will decline. However, poorer countries experience larger relative growth in food expenditure compared with wealthier countries. At the same time, projections suggest grain expenditure will decline while livestock expenditure increases. It must be emphasized that the extent of these changes depends on where the country is positioned in the development spectrum. Specifically, projected rates of growth for grain and livestock expenditure are larger in poorer countries, with the rate of increase in livestock expenditure exceeding that of grains. Consequently, we conjecture that food consumption in low income countries will shift toward livestock products, with grain occupying a diminishing role in consumers' budgets. In the next section, the empirical methodology and data are outlined. Following this, the estimated response of food demand to expenditure changes is briefly presented. These responses are then used as a predictive device in determining the impact of per capita expenditure and population growth on demand for food products.