May 04, 2008

Is China's Meat Consumption To Blame For High Food Prices?

Jim Lane editor of Biofuels Digest has written a very interesting report on the impact of China's increased meat consumption and how it is effecting grain supplies.

The report looks at changes in corn demand stemming from ethanol production and increased demand from China caused by higher meat consumption for the period from 1995 to 2008. Some of the key conclusions are as follows.

  • Rising demand for grain in China, stemming from an increase in meat consumption, is overwhelmingly the cause of supply and demand imbalances in corn production.
  • Given that the US population has grown 15 percent in the past 13 years, the 82 percent increase in US corn production left plenty for people, plenty for livestock, and plenty for ethanol.
  • Chinese meat consumption is still 45 percent less than the average consumption in the US. An additional 277 million tonnes of grain would be needed to support China at parity with the US. That would take 68 million acres to grow.
  • If the Chinese people had consumed the same amount of meat, per person, in 2007 as in 1995, there would have been enough grain left over to support 927 million hungry people with enough grain for an entire year,” said Lane.
  • The growth rate for grain in China is so intense that, even if the US ethanol industry were completely shut down tomorrow, increased Chinese demand would soak up the excess grain by 2011.
Source : Meat vs Fuel: Grain use in the U.S. and China, 1995-2008 (PDF)And this is just looking at China's increased consumption of grains. Other developing countries are increasing their consumption of meat as well as their incomes rise creating more demand on world grain supplies.But the one thing that is clear from this is that scaling back biofuels production would just be a temporary cure. If ethanol production was ended there would be a temporary supply glut that would lower prices but in just a few years China's grain demand would once again outstrip supply.Eliminating the demand on grains created by ethanol production would be nothing more than a quick fix temporary solution. The only real longterm solution is finding ways to increase supply through increased yields, bringing idled farmland back into production and improved farming practices.

1 comment:

Anonymous said...

Not only do I think the title is offensive, since the author misuses blame for cause, but it supports the xenofobic fear of country development. The author does point out that the Chinese consumption per head is not even of an American one. So why would one worry about that growing meat consumption elsewhere while the extremely high level of meat consumption in the US is ignored?

Evidently the global demand for grain is increasing at a tremendous, whether that grown is used for food, fuel or meat is up to the highest bidder. (plain old free market dynamics)High food prices are therefore in line with where they should be, and nothing more.

The high price is only of concern, since high food prices are especially a problem for low-income families worldwide since it soaks up a relatively high level of ones income. So in addition to measures to increase supply, measures should be taken to make food a lower proportion of peoples income

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