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Posts Tagged ‘processing

For all the pork in China

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"China’s strategic pork reserve is the direct consequence of an emerging, meat-eating middle class and a government determined to feed them," is how the journal Fast Coexist called it (link below). Photo: Courtesy Fast Coexist

“China’s strategic pork reserve is the direct consequence of an emerging, meat-eating middle class and a government determined to feed them,” is how the journal Fast Coexist called it (link below). Photo: Courtesy Fast Coexist

The Earth Policy Institute has a startling data highlight about the consumption of pork in China. Half the world’s pigs, more than 470 million of them, live in China. While meat consumption in the United States has fallen more than 5% since peaking in 2007, says the institute, Chinese meat consumption has jumped 18%, from 64 million to 78 million tons — twice as much as in the USA (see the charts below). China already buys more than 60% of the world’s soybean exports to feed to its own livestock and has been a net importer of pork for the last five years.

In late May 2013 the American company Smithfield Foods Inc, which is reported to be the world’s leading pork producer, was bought by the Chinese company Shuanghui International, which is the owner of China’s largest meat processor. The acquisition has been reported by China Daily; USA Today seemed cautiously happy about China’s buying of American hogs; Forbes hastily attempted an analysis of what it all means; Fast Coexist provided that analysis with knobs on.

People in China ate 53 million tons of pork in 2012, which is six times as much as in the USA. On a per person basis, consumption in China first eclipsed that in the USA in 1997. Now the average Chinese eats 39 kg of pig meat each year, compared with 27 kg in the USA. Charts: Earth Policy Institute

People in China ate 53 million tons of pork in 2012, which is six times as much as in the USA. On a per person basis, consumption in China first eclipsed that in the USA in 1997. Now the average Chinese eats 39 kg of pig meat each year, compared with 27 kg in the USA. Charts: Earth Policy Institute

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OECD-FAO Agricultural Outlook 2010-2019

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OECD-FAO Agricultural Outlook 2010-2019The OECD-FAO Agricultural Outlook 2010-2019 has just been released. A major joint document, this follows the regular, roughly ten-year wide focus series followed by both organisations on global agriculture. The new release has sections on food price volatility and the impact of commodity markets, and so will be of interest to the research and practitioner community looking at the finance-food-policy interfaces.

The Outlook says that demand for cereals for food and feed is projected to rise by one-third to 3 billion tons by 2050, and possibly higher due to a growing liquid biofuel market. Net cereal imports into the developing countries would increase almost three-fold to nearly 300 million tons by 2050, some 14% of their total cereal consumption. Demand for more income-responsive vegetable oils, meats and dairy products are expected to rise even faster. Livestock is one of the fastest growing sub-sectors in agriculture with over 80% of the projected growth in the next decade taking place in developing countries, particularly in Asia and the Pacific (especially China) and Latin America, outpacing growth in the OECD area by a factor of 2:1 over the next decade.

To support the necessary expansion in output in developing countries, FAO estimates the required average annual investment in primary agriculture and necessary downstream services (e.g. storage, processing) at USD 209 billion in 2009 prices (or USD 83 billion net of depreciation), much of which would come from private sources. Still, this amount represents a 50% increase from current levels and does not include the public investments required in such areas as roads, irrigation, electricity and education. In general since the 1970s, those countries with higher net investment per agricultural worker have been more successful at reducing hunger.

I’ve extracted three of the more interesting points from the Overview which prefaces the Outlook:

1. Average crop prices over the next ten years for the commodities covered in this Outlook are projected to be above the levels of the decade prior to the 2007/08 peaks, in both nominal and real terms (adjusted for inflation). Average wheat and coarse grain prices are projected to be nearly 15-40% higher in real terms relative to 1997-2006, while for vegetable oils real prices are expected to be more than 40% higher. World sugar prices to 2019 will also be above the average of the previous decade but well below the 29-year highs experienced at the end of 2009.

2. Developing countries will provide the main source of growth for world agricultural production, consumption and trade. Demand from developing countries is driven by rising per capita incomes and urbanisation, reinforced by population growth, which remains nearly twice that of the OECD area. As incomes rise, diets are expected to slowly diversify away from staple foods towards increased meats and processed foods that will favour livestock and dairy products. Also, with increasing affluence and an expanding middle class, food consumption in these countries should become less responsive to price and income changes, as is currently the case in OECD countries. This implies that larger changes in price and incomes will be required for consumption to adjust to any unforeseen shocks.

3. National and local emergency stockholding of key food security commodities, for food emergencies, particularly for low-income food importing countries, may increase confidence in the access to food in times of crisis and help stabilise local markets. Increased research, capacity building, and sharing of best practices to improve the functioning of emergency stock schemes are required. Whatever actions governments consider taking, it is always important to keep in mind the full set of policy measures, risks and possible responses for the targeted population.