November 18, 2013
In the quarter ending September 30th China’s gross domestic product increased 7.8% from the same three month period a year before. According to Citigroup economists, China’s aging demographics and shrinking workforce due to its on-child policy may cut 3.25% off of China’s annual growth rate between 2012 and 2030. To combat its ‘deteriorating demographics’ China has announced it will allow couples to have two children if one of the parents is an only child with exemptions still in place for rural dwellers, some ethnic minorities and couples where both parents are only children. Any growth in China’s population will mean an increase in demand for dairy products, corn, wheat, soybeans, and oilseed meal to feed livestock. As the U.S. is a prime supplier to China this relationship will become even more important over time. In the marketing year beginning October 1, China is expected to import 7 million metric tons of corn and 69 million tons of soybeans – both records. Most is used for feed to feed the livestock to fill the demand for 13.5 million tons of chicken and 52.7 million tons of pork consumed by China’s middle class. As population and disposable income increase in tandem, food consumption will increase in kind.