Highlights:

The OECD-FAO Agricultural Outlook 2023-2032 provides an assessment of the ten-year prospects for agricultural commodity and fish markets at national, regional, and global levels in a context of continued economic risks, uncertainty, and high energy prices.

The surge in agricultural input prices experienced over the last two years has raised concerns about global food security. This year’s Outlook demonstrates that rising fertiliser costs can lead to higher food prices. For each 1% increase in fertiliser prices, agricultural commodity prices would increase by 0.2%. The increase would be more significant for crops that use fertilisers as direct inputs than for livestock products that use them indirectly, with the exception of poultry and pigmeat production which relies heavily on compound feed.

The global projections of medium-term trends for supply, demand, trade, and prices for the main agricultural commodities and fish deviate only marginally from last year’s projections.

Nevertheless, the war in Ukraine continues to add uncertainties to food, energy, and input prices. At the onset of the war, reduced availability of grains and fertilisers were a major concern for global markets. A year later, supply issues have improved thanks to the enforcement and subsequent extensions of the Black Sea Grain Initiative.

The global food consumption in calories – the main use of agricultural commodities – is projected to increase by 1.3% per year over the next decade, a slower pace than the previous decade due to the foreseen slowdown in population and per capita income growth.

The second most important use of agricultural commodities is as feed for livestock and increasingly aquaculture. The Outlook highlights the rapid expansion and intensification that is expected in the production of livestock in low- and middle-income countries, resulting in a fast-growing demand for feed over the next decade. In contrast, in high-income countries and some upper middle-income countries, including China, lower growth in livestock production and improved feeding efficiency should result in slower growth in feed demand compared to the last decade.

Demand for first generation biofuel feedstocks is expected to grow slowly over the next ten years.

Growth in total global agricultural production should remain at 1.1% per year. Most of this growth will occur in middle- and low-income countries. Global crop production growth will mainly be driven by increased productivity rather than increased land use. Yield improvements are projected to account for 79% of global crop production growth, cropland expansion for 15%, and higher cropping intensity for 6% over the Outlook period.

Similar to trends in crop production, a large share of the projected 1.3% annual growth in livestock and fish production will result from improvements in per animal productivity resulting from more efficient herd management and higher feed intensity. Poultry is projected to account for about half of the global growth in meat production due to sustained profitability and favourable meat-to-feed price ratios. Pigmeat production is still recovering from the outbreak of African Swine Fever (ASF) in East Asia and is projected to resume a pre-crisis growth path in a few years. Global milk production is projected to grow strongly in the coming decade, with half of this growth occurring in India and Pakistan.

Despite its limited growth prospects, aquaculture overtook the global production volume of capture fisheries in 2022.

The Outlook highlights the significance of global agricultural greenhouse gas (GHG) emissions, which are projected to increase by 7.6% in the next decade. At the global level, growth in GHG emissions will be lower than in the previous decade. Nevertheless, pioneering efforts need to be widely adopted to ensure that agriculture contributes effectively to climate change mitigation, as set out in the Paris Agreement, especially for livestock which is estimated to account for 80% of the increase in agricultural GHG emissions.

At the same time, agricultural production systems face the challenge to adapt to a changing climate, including more frequent and intense extreme weather events.
Mitigation and adaption solutions include large-scale and inclusive adoption of climate-smart and carbon-neutral production processes and technologies.

Trade in primary agricultural commodities and processed products is projected to grow in line with production over the next decade. Russia’s war against Ukraine has been impacting agricultural commodity trade, especially Ukrainian exports, and prices. The Black Sea Grain Initiative, agreed to in July 2022, and the European Union–Ukraine Solidarity Lanes have helped, however, to re-establish trade to support global food security. Export bans aggravate the adverse effect of price uncertainties and increase prices. This results not only in a negative impact on global food security (and livelihoods) in the short term, but undermines supply capacity over the long term.