WASHINGTON, D.C. — China and the United States have a heavily dependent relationship, and agriculture is one area in which the connection is easy to see: United States agriculture exported more than $25 billion in goods to China in 2012 and 2013.
"China is our largest export destination for food and agriculture," said Holly Wang, professor at the Department of Agricultural Economics at Purdue University. She was one of the speakers during the National Coalition for Food and Agriculture Research meeting about the role of U.S. agriculture in Chinese markets.
She said the Chinese government wants to be 100 percent self-sufficient but cannot meet the demand of the population. Its population continues to grow, and a dietary transition and economic growth allowing people to eat more calories is the primary reason for this. People are getting richer and able to afford animal protein like meat and dairy products.
Pork is the most-consumed protein, but milk consumption has grown dramatically, from about 5 kilograms per person annually in 1999 (about 11 pounds) to more than 25 kilograms in 2011.
The Chinese government is working to be able to better meet the needs of the population, but there are obstacles. Water scarcity, falling soil fertility, pollution, food safety, rising labor costs and the increased cost of land are among the problems.
"The Chinese government is trying to implement policies to address these challenges," Wang said. It is providing subsidies to farms to help defer costs and encouraging land-sharing – a 250-acre farm is considered very large.
More than half the land is now irrigated, but the groundwater is rapidly dropping, almost depleted, she said.
Soybeans and corn are some of the largest exports from the United States to China. Dried distillers grains (DDGs) are also needed. If the Chinese start raising more livestock, more grains will be needed from the United States, Wang said; if not, meat itself will continue to be needed.
"(Chinese) Locals are not confident in domestic meat," she explained. U.S. meat is marketed as a high-end product – it is more expensive, but people are more likely to buy it. "The United States has a reputation to be safe and clean."
China has to approve and certify all companies before any agriculture commodities can be shipped there, which can slow the process, Wang explained.
Joseph Glauber, senior research fellow at the International Food Policy Research Institute, studies price volatility, global grain reserves, crop insurance and trade. He said growth within the Chinese population and the economy has slowed. It may have indirect impacts on agriculture, like an increase in petroleum prices, but the consumption of American ag products will continue.
China is one of the largest markets for many countries in the world. Brazil exports more there than any other country, for example. As soon as Brazil’s soybean crop is harvested, China stops purchasing soybeans from the United States. It’s a seasonal shift, Glauber noted.
Wheat consumption has been fairly flat and rice imports to China are only slightly higher. Cotton, still a big export from the United States to China, has dropped by 33 percent in the last five years because of competition from other countries, he said. India is sending yarn, which cuts down on need for cotton imports.
Wang said some products, such as blueberries and cherries, were heavily imported in China, but the produce was expensive. China has started growing what it can, decreasing imports.
Fred Gale, senior economist at the USDA, said the Chinese people are concerned about pesticide residues and heavy metals in Chinese food, and do not trust government labeling. If a food is labeled organic, even if someone went to inspect and certify the farm, the farms are only inspected once and never again.
He said there is awareness about environmental stewardship that wasn’t in place 10 years ago. Now, most supermarkets have organic counters.
