Livestock farmers' best prospects lie in tapping developing countries' growing demand for meat and dairy products, the US Federal Reserve has said, highlighting the potential for further huge gains in China.

Countries such as China and India are expected to set the pace for the global economic recovery by posting growth at a time of contraction in many mature economies, such as the US and UK.

This looks set to sustain a pattern of "robust income growth for a rising middle-class", for whom rising levels of meat and dairy consumption are a key objective.

"Foreign consumers will enjoy some of the fastest-rising disposable incomes in the world – with per capita meat consumption patterns to match," a report from the Federal Reserve's Kansas City office said.

"Rising global demand will offer significant new profit opportunities."

'Ominous sign'

Prospects after the current recession look particularly poor, given that spending has so far "plummeted" 1.7%, with declines in beef, pork, poultry and milk.

"The contractions in expenditures during the current recession could be an ominous sign of steeper contractions going forward," the briefing said.

"Most potential gains in [protein] demand will probably come from developing countries."

China's potential 

The report, which highlighted the importance of providing the appropriate products for foreign markets, singled out the importance of China, where consumption of meat - per person - has soared by 532% since 1975, yet still remains at less than half US levels.

Consumption of milk has rocketed by 3,000%, yet remains at only about 10% of American levels.

"While protein consumption in developing countries like China has been impressive, the future may bring even further growth," the Fed said.

A graph comparing economic output with demand for livestock products "suggest that if China follows global patterns, a rise in economic activity could foster significant increases in protein consumption".