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Continued: Many Chinese mouths to feed

SHANGHAI - Enormous cranes pivot in the haze on the banks of the Yangtze River, their operators unloading barge after barge of soybeans. The scene repeated itself over and over this fall as oceangoing vessels pulled up to the Chinese shore to unload yet more food for this hungry nation of 1.3 billion, more than four times the size of the United States.

China's imports of soybeans, milk and pork skyrocketed this year, with far-reaching effects on the world's food chain. Food prices rose everywhere. World grain reserves, any country's insurance against famine, fell to near historic lows.

"Literally, your food prices are higher today because the Chinese economy has developed so rapidly over the last decade," said General Mills CEO Ken Powell. "They want their diets to improve. They have the money to pay for it. And the fact that they're eating vastly more quantities of protein than they did 10 or 15 years ago is a direct cause for why we're paying more for food here in the U.S. today."

Meanwhile, there's less land to farm, as growing urban areas and natural disasters eat China's remaining fertile soil.

And like the United States and Europe, China is increasingly using crops for fuel. Said Chinese grain trader Leo Liu, biofuels mean "we have another big mouth."

Pork exports to China surged 214 percent through September, nearly equaling the volume sent to Japan, the longtime best customer for U.S. hog farmers. China is now the fourth biggest consumer of U.S. dairy products behind Mexico, Canada and Japan. China also imports 6 million tons of palm oil from Malaysia and Indonesia.

Liu thinks China will soon, in perhaps two to three years, begin importing corn, one of a few crops -- rice and wheat are others -- that China still grows in adequate abundance.

The Chinese consume about 20 million tons of vegetable oils each year, about half of that coming from soybeans. The nation grows 15 million tons of soybeans each year; another 35 million tons come from South America, the world's largest producer, and from the United States, the No. 2 producer.

Pressures within China could force even more imports soon. China lost another 100,000 acres of arable land last year to urbanization, natural disasters and conservation projects. The current figure, 299 million acres, is down from 316 million in 2001. China considers 296 million acres its basic need.

Chinese wheat consumption has held steady, but consumption of coarse grains -- such as corn, oats, sorghum and barley -- has climbed 30 percent in the past decade. The amount of grains fed to animals also rose 30 percent during that time.

For Liu, China's growing hunger is an opportunity. Last year, he opened an office in Shanghai for CHS, the Inver Grove Heights energy and food cooperative that has operations in the United States and Brazil growing soybeans. His job for now: find new customers in China for all of those beans.

Matt McKinney • 612-673-7329

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