Highlights from a presentation by Brett Stuart, Global AgriTrends, presented at the Iowa Cattleman’s Convention December 2014.
- Asia has more people than the rest of the world combined. This population continues to grow and their income is also growing quickly as they become economic powers.
- China has recently passed the U.S. as the world’s biggest economy.
- Demand comes from an increase in population and an increase in income – both are happening in Asia.
- We (farmers globally) will need to produce more food in the next 50 years than the total food that has been produced over the last 7,000 years.
- Global need (demand) will be 9 million more tons of beef over the next 10 years.
- China has 300 million people in their middle class (that equals the total U.S. population) and this will double by 2022.
- Sheer numbers – the wealthiest 10% of China’s population represents more people than the total population of Japan.
- The Middle Class is globally 2 billion people today and is expected to be 4.9 billion by 2030.
- The demand for beef is not only steady but growing. As people move into the middle class, they want to buy beef.
- China’s own beef production has kept up with demand in the past. This is no longer the case.
- Because of income growth, demand for beef is up 42% in China over the last 2 years.
- Chinese consumers want to see white fat beef, not yellow fat beef, so they want grain fed and not grass fed beef.
- China’s corn policy has their corn prices at $9.70/bushel to encourage their farmers to plant corn – this is forcing their own livestock producers to cut back production.
- China will have a 1 million metric ton beef shortfall that will need to be met by imports over the next year.
- Chinese consumers (because of their own internal food quality and food safety issues) have a huge demand for food products labelled Made in the U.S.A.
- Record beef prices are a global meat shortage phenomenon, not just beef and not just the U.S.
- Global beef prices are up 25% over the last 12 months.
- Global beef production (supply) has been flat for the last 10 years, while pork and broilers have grown 20-25% over the same time period.
- The combination of feed costs and drought have affected beef production globally.
- India and Brazil are the only two countries that have increased beef production and beef exports in the last 5 years.
- Brazil could pass the U.S. as the #1 beef producer (tons/year) in the next 2 years. This should not be a major concern for the U.S. as Brazil’s own population demands a lot of beef and they are experiencing both population and income growth. Also, they export to different foreign markets than the U.S. does, so we do not compete head to head.
- We do not (officially) import beef into China. This goes back to the BSE ban, but this ban is expected to be dropped in the next 12 months as consumer demand will override current policy.
- They will not import meat (beef or pork) that has been fed ractopamine, so that will also limit what we will be able to export.
- Even if we don’t export beef directly to China, their demand affects global demand and will affect the supply available to our other foreign customers, indirectly increasing demand for U.S. beef.