Industry Trends and World Food Requirements

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Industry Trends and World Food Requirements

• Chapter 2

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Goals

• Give a basic understanding of the many areas that
  the study of Animal Science covers
• Areas
• Animal Industry
• Animal Behavior
• Diseases/ Health
• Meats
• Nutrition
• Genetics
• Reproduction

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What is Animal Science?

• Collective study of domestic animals and the
  disciplines that affect production

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What is Animal Science?

• Animal Breeding and Genetics
• The study of genetic code and how selection can
  improve measurable traits in animals
• Nutrition
• The study of nutrients and how animals utilize
  them
• Reproduction
• Study of estrous cycles and how chemical systems
  in the body affect production

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What is Animal Science?

• Behavior
• Relatively new area which studies how animals
  interact in artificial environments and with each
  other
• Meat Science
• The science of handling, distributing and
  marketing of meat
• Biotechnology
• Includes the tools used to modify products to
  improve plants and or animals to develop and
  improve production variables

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Trends

• Increased vertical integration (control of 2 or
  more industry segments by the same firm).
• Ownership integration one firm owns 2 or more
  industry segments
• Contract integration ownership of segments may
  be separate, but one firm may control (at least
  partially) multiple segments through contract
  arrangements

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Trends

• Production unit (farm/ranch/plant)
• Fewer production units (fewer producers)
• Larger average size
• More specialization
• Especially true for poultry, dairy, swine, beef
  feedlot. Less so for cow-calf and sheep
  producers.

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Trends

• Genetic base
• Narrowing for poultry, swine and dairy
• Relatively few breeds and few seedstock breeders
• Trend toward large specialized companies
• Beef cattle Many breeds and breeders. Number
  of breeds has increased.
• Dairy cows Over 90 are purebred Holstein in
  U.S.
• Sheep About 50 breeds in U.S. but only about 8
  are prominent

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Trends

• Increased geographic concentration
• Somewhat related to weather, resources
• Poultry
• Chickens southeast
• Turkeys southeast, MN, other
• Swine Corn Belt traditional area recent growth
  in Mid-Atlantic and southern plains
• Beef cow-calf and sheep relatively little
  concentration
• Beef feedlot southern and middle plains
• Dairy traditional area was northern states in
  mid to eastern US recent growth in a few sunbelt
  states

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Vertical Integration Incentives

• Value Added Products
• Greater opportunities exist for profit
• New Product Development
• - Add consumer ease
• - Case Ready Products

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Vertical Integration Incentives

• Brand Marketing
• Value Added Products
• Brand Loyalty How much will you pay?
• Successful CAB Certified Angus Beef

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Vertical Integration Disincentives

• Capital and Risk
• Immense amount of dollars tied up in facilities
  and livestock for long durations of time

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Vertical Integration Disincentives

• Product Control
• Different genetic pools
• Different environments
• Poultry more successful due to controlling the
  above.
• Beef least successful.

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Vertical Integration Disincentives

• Greater Management
• Need for control throughout requires a tremendous
  amount of supervision from Conception to
  Consumption

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World Agriculture

• Animals Supply Basic Human Needs
• U.S. and Europe 3rd World
• 1. 1.
• 2. 2.
• 3. 3.
• 4. 4.
• 5. 5.

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World Agriculture

• Animals Supply Basic Human Needs
• U.S. and Europe 3rd World
• 1. Food 1. Work
• 2. Clothing 2. Clothing
• 3. Fertilizer 3. Capital
• 4. Companionship 4. Food
• 5. Capital 5.

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Levels of Agricultural Development

• Developed
• Less than 10 of population farming
• Highly specialized ag production
• 1 to 2 products
• Highly mechanized
• High per capita income
• High literacy rate for total population

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Levels of Agricultural Development

• Subsistence
• Approximately half of population farming
• Each family consumes what it produces with small
  portion to sell
• A lot of hand and animal labor
• Low per capital income
• Low literacy rate

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Levels of Agricultural Development

• Primitive
• Entire population involved in food production
• Scarcity of food
• All done by hand, little animal assistance
• Extremely low per capita income
• Very few literate individuals

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Factors Affecting World Production

• Environment
• Tropical
• Deserts
• Cold
• Temperate

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Factors Affecting World Production

• Religion
• Muslims
• Judaism
• Hindu

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Factors Affecting World Production

• Religion
• Muslims
• No Pork
• Judaism
• No Pork
• Hindu
• No Beef

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Factors Affecting World Production

• Economics
• Developed
• North America, Oceania (Australia, New Zealand),
  Israel, Japan, South Africa, Russia
• Undeveloped
• Africa, Asia, Latin America

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Food Supply

• Protein Supply from Animal Products
• U.S. Developing Countries
• 70 35
• Calories
• U.S. Developing Countries
• 66 Meat 16 Meat
• 34 Grains/vegetables 84 Grains/vegetables

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Food Expenditures

• Income Spent on Food,
• U.S. 7.5
• Europe 11.5
• Mexico 24.5
• Developing 55.0

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World Food Demand

• World demand for food of animal origin will
  double during the next 25 years
• Demand for white meat will increase twice as fast
  as demand for red meat

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Reasons for increased food demand

• Growth in world population
• Hunger and malnutrition
• Economic growth

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Growth in world population
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• Livestock Industry Trends and World Food Demands
• What are the different areas of Animal Science?
• What is the basic structure of the Animal Science
  Industry?
• What is vertical integration?
• How has production unit changed over the years?
• How has the genetic pool changed over the years?
• What are the incentives to vertical integration?
• Explain the different levels of agriculture
  development.
• How does religion affect animal products
  production?
• In terms of protein intake, how does the U.S.
  differ from developing countries?