The Washington Post reports:
Beijing — For a sense of how this country’s changing demand for food is reshaping world markets, Liu Shuwen’s journey from street chicken vendor to poultry industrialist is a good start.
There are the 24,000 hens he currently raises, triple what he had a few years ago. There’s the expansion to 60,000 he is planning. Then there’s the feed factory that’s under construction, where Liu and his partner will add to growing world grain demand by mixing hundreds of tons of soybeans and corn a year into a recipe he feeds his chickens and sells to other farmers.
It’s a dramatic turn for a man who grew up incubating chicks under his bed, and one that shows why farmers, food economists and others conclude that the world may be entering an era of steadily rising food prices. As developing countries become richer, so do their diets, shifting from traditional staples such as rice and wheat to meat and dairy products, which require more grain as feedstock. That trend, along with the increasing use of corn in fuel, is taxing world grain supplies.
So far, that has been a boon to the United States. China relies on American farmers in particular for soybeans to use in animal feed. Last year, total U.S. soy exports were nearly $20 billion — triple the level of a decade ago.
And in general, rising prices for staple commodities such as wheat have less of an impact on consumer prices in the United States and other developed countries, where people eat more processed foods, than in developing economies. The wheat in a grocery store loaf of bread, for example, contributes only a small fraction of the final price; the rest reflects the energy, labor, shipping and other costs involved in its preparation.
But eventually, higher commodity costs will pass through to consumers. More expensive corn and soy ultimately mean more expensive dairy products and meat.
Read more: http://www.washingtonpost.com/business/economy/china-food-choices-reshaping-world-markets/2011/04/27/AFX2EH9G_print.html
Beijing — For a sense of how this country’s changing demand for food is reshaping world markets, Liu Shuwen’s journey from street chicken vendor to poultry industrialist is a good start.
There are the 24,000 hens he currently raises, triple what he had a few years ago. There’s the expansion to 60,000 he is planning. Then there’s the feed factory that’s under construction, where Liu and his partner will add to growing world grain demand by mixing hundreds of tons of soybeans and corn a year into a recipe he feeds his chickens and sells to other farmers.
It’s a dramatic turn for a man who grew up incubating chicks under his bed, and one that shows why farmers, food economists and others conclude that the world may be entering an era of steadily rising food prices. As developing countries become richer, so do their diets, shifting from traditional staples such as rice and wheat to meat and dairy products, which require more grain as feedstock. That trend, along with the increasing use of corn in fuel, is taxing world grain supplies.
So far, that has been a boon to the United States. China relies on American farmers in particular for soybeans to use in animal feed. Last year, total U.S. soy exports were nearly $20 billion — triple the level of a decade ago.
And in general, rising prices for staple commodities such as wheat have less of an impact on consumer prices in the United States and other developed countries, where people eat more processed foods, than in developing economies. The wheat in a grocery store loaf of bread, for example, contributes only a small fraction of the final price; the rest reflects the energy, labor, shipping and other costs involved in its preparation.
But eventually, higher commodity costs will pass through to consumers. More expensive corn and soy ultimately mean more expensive dairy products and meat.
Read more: http://www.washingtonpost.com/business/economy/china-food-choices-reshaping-world-markets/2011/04/27/AFX2EH9G_print.html
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