According to the latest Agricultural Outlook report from the OECD, which provides a forecast for 2007 to 2016, growth in food demand is expected to significantly slow after strong production levels in 2016. In 2016, production for meat, dairy products and fish was the highest in history, while oilseeds, biodiesel and cotton recovered their prices. Agricultural markets are heavily dependent on worldwide factors, such as global GDP growth and the price of crude oil, and in 2016, global GDP growth was 2.9%, the lowest since 2009, while crude oil prices increased at the end of 2016. This combination resulted in price decreases in the 2016 global agricultural market.

Over the last 10 years, the growth in food demand was primarily led by China, as rising meat and fish demand resulted in feed consumption increasing almost 6% each year. Growth was also propelled by the international biofuel market, in which feedstock inputs use (i.e., goods and materials) increased by approximately 8%. However, demand is starting to stabilize in many countries for such inputs. For example, although energy prices are on track to increase, demand for biofuel feedstocks such as maize and sugarcane for ethanol, and vegetable oil for biodiesel will increase sluggishly, except in developing countries.

Worldwide demand for cereals is predicted to be flat, with the only growth coming from developing countries. Demand for meat will similarly be flat. Dairy products demand is expected to increase, due to changed attitudes, towards dairy fat and less-processed foods. As a result of projected population increases in India and Sub-Saharan Africa, these two regions are forecast to drive the majority of global demand for agricultural markets, with China continuing its contribution at a lesser level.

Source: OECD