We were at the 2010 USDA Ag Outlook Forum February 18-19 in Washington D.C. There were a lot of excellent breakout sessions, but I found the one on China intriguing, simply because of its size and ability to single handedly impact the Ag economy. In fact, China is the world’s largest Ag economy. These numbers will give you some perspective on the scale:
|
Industry |
China |
US |
|
|
|
|
|
Poultry |
4.83M |
2.19M |
|
Hogs |
419M |
86M |
|
Sheep/Goats |
279M |
6M |
|
Cattle |
105M |
96M |
|
Horses/Donkeys |
14M |
4M |
The Chinese government has long pursued food self-sufficiency as a policy priority. The information provided at the Forum makes you wonder if this is a realistic goal and what the consequences may be for China’s natural resources. One fundamental fact that makes you question food self-sufficiency is China has 9% of the world’s agricultural land and 22% of the population.
Intensive agriculture has been practiced for many years. This has resulted in significant increases in pesticide and fertilizer use. China uses twice as much chemical fertilizer as the US. Their share of world chemical fertilizer use is 3 times its share of agricultural land. This intensive agriculture has resulted in resources depletion and Ag pollution. There is groundwater depletion in Northern China. Soil erosion, fertility loss and overgrazing are common place. Pesticides and veterinary drug residues are found in food and accumulating in the environment. There are 400M metric tons of livestock waste annually. Ag pollution accounts for 42% of all pollution in China.
Many China policies actually work against sustainability. Increasing grain production
is a top priority that encourages fertilizer use, depletion of groundwater and soil erosion. Low prices for fertilizer, water and fuel discourage conservation. Policies support concentrated livestock production. The lack of land ownership rights discourages long-term stewardship.
One sign of changing times could be China’s increased soybean imports. To grow the soybeans that China imports would take 64M acres and 6.6 Trillion pounds of fertilizer. Many of the experts believe China will need to substantially increase Ag imports to feed its growing population. This could produce many opportunities for US agriculture.
Several interesting observations were provided about the eating/buying habits of the Chinese. Safety dominates at home purchasing decisions. Raised in the USA is a powerful brand because it denotes quality and safety. Pork consumption is increasing as incomes rise and grain consumption declines. Chinese customers are increasingly affluent and favor high value and premium products. These characteristics should match up well with US Ag products.