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US agriculture readies for China’s baby boom?

US agriculture readies for China’s baby boom?

The kids are not alright in China — and the effect of a population shift could have significant implications for U.S. agriculture.

Thirty years of a government mandated one-child policy have flipped China’s family tree into the dreaded 4-2-1 formation — four grandparents; two parents; and one child. Despite China’s present 1.4 billion population, the long-terms effects of a 4-2-1 combo have Beijing officials tabulating some bitter demographic numbers and facing the realization that a one-child policy is a one-way ticket to economic ruin.

Last week Beijing announced an easing of the one-child policy … or something to that effect, but the changes may not be what they seem. Taken at face value, the policy change could add several million babies to China’s present 15-million-births-per-year, in turn driving up dairy and meat consumption. And that’s where a relaxed one-child policy would primarily impact U.S. agriculture — grain for livestock feed.

From the Wall Street Journal [3]: “China is forecast to import 7 million metric tons of corn and 69 million tons of soybeans in the marketing year that started on Oct. 1, both records, according to the U.S. Department of Agriculture. Most of that is used to fatten animals consumed by China's burgeoning middle class, which ate 13.5 million tons of chicken and 52.7 million tons of pork, also records, USDA data show. China will import 775,000 tons of pork in 2014, again the most ever.”

China’s population worries aren’t comparable to the death spiral taking place in nearby Japan. In 2011, Japan set off demographic alarms when baby diaper sales were eclipsed by adult diaper sales — Pampers [4] defeated by Depends. (And Western Europe is not in much better shape, with birth rates hovering around 1.5.) But China is unique; the one-child mandate is promoted and forced by a government hellbent on controlling population in the same manner it deals with grain or oil quotas.

 

See related, Depends outselling Pampers a sure sign of collapse [5]

 

When the communists first took over in 1949, China was looking to kickstart a population boom — fodder for the army and massive labor projects. China’s population blossomed from 500 million in 1949 to nearly 1 billion only 30 years later. In 1979, China slammed the brakes on the procreation policy and announced a one-child maximum and birthrates dropped from about 4.77 in the 1970s to the present 1.5. (There are two-child exceptions for ethnic minorities, farmers who have a firstborn daughter, and for families in which both parents are only children themselves.)

Any real change?

Will Beijing’s announced one-child policy change really affect overall numbers? It’s tough to tell: The change, despite international headlines, is more of an adjustment. From now on, if either Chinese parent is an only child, that couple will be allowed a second child. Slightly confusing, but in the past, both parents had to be only children to qualify for the exemption. China’s population policy, even with the change, remains draconian — forced abortions, sex selective abortions (118 boys born for every 100 girls; China’s boy-girl sex ratio [6] is the highest in the world), sterilization and harsh fines estimated in the billions are still in practice — orchestrated directly from Beijing.

Yet, as China’s population ages and the 4-2-1 effects build, the one-child policy may be headed for more than a minor adjustment. As CoBank economist Dan Kowalski tells the Wall Street Journal: “More children will mean more dairy products and as those children age, meat consumption will rise. China will not be able to meet all its corn and soybean needs so it will rely on more imports. The U.S. is a prime supplier to China and that trade will become more important as time goes on."

The agriculture industry is well aware of the bottom line demographic numbers — even minor population changes in China can translate to major export changes in the U.S.

 

•Image courtesy of Wikimedia Commons [7]

 

Follow me on Twitter: @CBennett71 [8]

Email me: [email protected] [9]

 

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