October 16, 2013

India's milk, meat, and egg consumption is rising faster than cereals.  Within this category, output of eggs and meat has risen faster, with poultry at the highest. Animal products have also contributed to 33% of the incremental food inflation over the past five years, as consumption baskets are revised and could be higher, according to Credit Suisse.

Of the country's agricultural output, 31% comes from animal products: milk, meat, egg, fish and others such as silk and honey. As these are seeing rapid growth, their contribution to incremental growth has been higher.

While the report stated that demand for chicken meat has accelerated, the quantum of the change is uncertain; three seperate sources suggest different levels of demand growth. The National Sample Survey Organisation (NSSO) surveys suggest that demand for chicken meat saw 20% Compounded Annual Growth Rate (CAGR) between 2005 and 2010. However, the Animal Husbandry department believes chicken meat output has seen only a 8% increase in CAGR. FAO reveals that the chicken population has risen by 12%.

According to Credit Suisse, growth in milk production in India has been quite steady at about 4% a year over the past few decades. About half of that has come from an increase in the numbers of cattle and half from an increase in yields. Much of the yield increase seems to come from an improvement in breeds, particularly cows. For buffaloes, which contribute to more than half of India's milk production, the yield improvement has been quite low. Despite having the largest heads of cattle globally, India's milk output is only the second largest after the US, with yields per cow at the bottom, despite a recent increase, Credit Suisse says.

According to the report, milk has been a significant contributor to food inflation over the past five years, even though the recent tempering of milk price appreciation has meant that its contribution to food inflation over the past year has been much lower.

Meat production as per official statistics has been growing at the fastest pace among all agricultural sub-categories, and particularly so among animal products. Exports of animal products are rising at a rapid pace, with an estimate of more than 7% in total output currently exported. This is primarily meat though marine and poultry and dairy exports have also risen, the report says.

Almost all of the increase in meat production in India has come from buffalo meat, 90% of which is exported. The increase has come primarily from Uttar Pradesh (UP), Andhra Pradesh (AP) and Punjab. The numbers slaughtered in 2011 were 6.9 million, which could have risen to about 10.5 million animals by fiscal year 2013. The fastest growing form of meat production is poultry which saw a CAGR of 10%+ per annum in 2006-11, and helped create about 0.75 million jobs yearly during 2005-10.