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Editor's Pick 2014:<br>China's net grain imports surge in 2012 and 2013

Friday, January 2, 2015

China’s demand for imported grains, much of it from the United States, has surged recently, with imports of cereal grains rising to 16 million tons in 2012 and 18 million in 2013. Imports in 2013 included 3 million tons of corn and 4 million tons of DDGS (distillers dried grains with solubles; a co-product of U.S. corn ethanol production used for feed) from the United States. In 2013, the United States supplied 70 percent of China’s wheat imports and, for the first time, China became a major market for U.S. sorghum. China’s demand for feed grains appears to have reached a turning point, as a tightening labor supply and rising feed costs force structural change in China’s livestock sector. Labor scarcity, animal disease pressures, and rising living standards are prompting rural households to abandon “backyard” livestock production and shift more production to specialized farm enterprises that rely more heavily on commercial feed. Because of this, China has switched from being a corn exporter to importing 3-5 million tons annually since 2009. Rising feed demand has also pushed up costs and motivated feed mills and livestock producers to explore new feed ingredients like DDGS and sorghum. Find this chart and additional analysis in "China in the Next Decade: Rising Meat Demand and Growing Imports of Feed" in the April Amber Waves. Originally published Thursday May 22, 2014.

Editor's Pick 2014: China’s net grain imports surge in 2012 and 2013

Tuesday, December 23, 2014

China’s demand for imported grains, much of it from the United States, has surged recently, with imports of cereal grains rising to 16 million tons in 2012 and 18 million in 2013. Imports in 2013 included 3 million tons of corn and 4 million tons of DDGS (distillers dried grains with solubles; a co-product of U.S. corn ethanol production used for feed) from the United States. In 2013, the United States supplied 70 percent of China’s wheat imports and, for the first time, China became a major market for U.S. sorghum. China’s demand for feed grains appears to have reached a turning point, as a tightening labor supply and rising feed costs force structural change in China’s livestock sector. Labor scarcity, animal disease pressures, and rising living standards are prompting rural households to abandon “backyard” livestock production and shift more production to specialized farm enterprises that rely more heavily on commercial feed. Because of this, China has switched from being a corn exporter to importing 3-5 million tons annually since 2009. Rising feed demand has also pushed up costs and motivated feed mills and livestock producers to explore new feed ingredients like DDGS and sorghum. Find this chart and additional analysis in "China in the Next Decade: Rising Meat Demand and Growing Imports of Feed" in the April Amber Waves.

Indian rice prices typically lower and more stable than world prices

Thursday, December 4, 2014

Because rice is an important commodity for Indian producers and consumers, Indian Government policies intervene heavily in its domestic rice market. Particularly since the global price spike in 2008, India’s system of providing Minimum Support Prices (MSPs) for growers, distributing rice purchased at the MSP to consumers at subsidized prices, and placing periodic bans or quotas on rice exports, has kept domestic rice prices lower and more stable than world prices (represented by the export price of Thai rice). In 2008, India increased subsidized rice distribution and banned most exports of non-basmati (aromatic, long grain) rice to prevent higher world prices from affecting the domestic market; however, domestic rice prices still increased more than 30 percent between mid-2007 and early 2010. According to ERS research, Indian rice consumers were able to maintain rice consumption, but did so primarily by reducing expenditures on non-staple foods, health care, and durable goods. India’s higher level of exports since 2011, along with increases in MSPs, has contributed to current concerns with inflation in domestic rice prices. Find this chart and more in-depth research in Coping Strategies in Response to Rising Food Prices: Evidence from India.

Calorie availability and importance of food in household spending are inversely related

Thursday, October 16, 2014

Celebrated on October 16, World Food Day provides an opportunity to raise awareness of the worldwide problems of poverty and hunger. Countries vary in how much their citizens spend on food at home as a share of consumption expenditures. Consumption expenditures include all household spending, but not savings. High-income countries such as the United States and the United Kingdom have higher food spending in absolute terms, but their food spending share is low. These two countries spent less than 10 percent of their consumption expenditures on food purchased from supermarkets and other food stores in 2013, while the share approached 50 percent in low-income countries such as Kenya. Per capita calorie availability follows the reverse pattern. In 2011, U.S. per capita calorie availability was 3,639 calories per day, while Kenya’s was 2,189 calories—more than one-third less. Middle-income countries such as Brazil and China surpassed daily calorie availability of 3,000 calories per person with a 16-percent share of consumption expenditures for food at home in Brazil and 26 percent in China. The data for this chart come from ERS’s Food Expenditures data product, updated on October 1, 2014, complemented with data from United Nations, Food and Agriculture Organization, FAOSTAT.

India's cereal stocks cycle up and down, but typically exceed targets

Friday, August 22, 2014

India’s government cereal stocks cycle up and down, but typically exceed government targets set to ensure adequate supplies for domestic distribution programs and provide a strategic reserve. Cereals in government stocks are procured from growers at annually revised minimum support prices (MSPs). Most procured cereals are distributed at subsidized rates through the Targeted Public Distribution System and other programs, with residual supplies accumulating in government-held stocks. The peaks and valleys in government cereal stocks are associated with cycles in price incentives due to changes in MSPs. Relatively low stocks and large increases in MSPs in the late 1990s led to a stock buildup by the early 2000s, and low stocks in the mid-2000s, combined with rising world prices, led to higher MSPs and another stock buildup beginning in the late 2000s. Price policy announced for 2014/15 crops so far indicates relatively small nominal increases in wheat and rice MSPs. For additional information see Indian Wheat and Rice Sector Policies and Implications of Reform.

India close to becoming world's largest cotton producer

Tuesday, August 5, 2014

India’s cotton production has expanded rapidly since the early 2000s, passing the United States to become the world’s 2nd largest producer in 2006/07 (August/July marketing year), and now poised to surpass China—the world’s largest producer. India’s cotton production began to expand with the introduction of genetically-modified Bt (Bacillus thuringiensis) cotton; higher yield potential and increased pest resistance boosted profitability and stimulated growth in both area and yields. Since 2000/01, India’s cotton area has increased about 2.8 percent annually and is now more than double the area sown to cotton in China and more than triple U.S. cotton area. However, India’s cotton yields, while improving about 6 percent annually since 2000/01 to an average of 530 kgs/ha during 2009/10-2013/14, remain well below those achieved in China (1,357 kgs/ha) and the United States (916 kgs/ha). With gains in production, India has emerged as the world’s second largest exporter of raw cotton, after the United States, and the second largest consumer of raw cotton, after China. Cotton processed in India is destined for its large domestic market as well as exports of cotton yarn, fabric, and clothing. Find additional analysis of cotton market developments in Cotton and Wool Outlook: July 2014.

Import restrictions begin to curtail growth in U.S. feed exports to China

Monday, June 23, 2014

With record shipments so far in 2013/14 (September/August marketing year), China has emerged as a major buyer of U.S. feed grains, but this trade is now being disrupted by China’s rejection of U.S. shipments containing unapproved genetically modified (GM) material. U.S. corn exports to China have reached 4.0 million tons so far in 2013/14 and China has also, for the first time, initiated large-scale imports of U.S. sorghum, with imports of 2.3 million tons in the first 7 months of 2013/14. China has become the largest U.S. export market for distillers dry grains with solubles (DDGS, a byproduct from production of corn-based ethanol) with sales to China of 2.8 million tons in 2012/13 and 4.0 million tons so far in 2013/14. Feed sales to China are being driven by the continued expansion of meat and feed consumption, high Chinese corn prices, and demand by animal product producers for cost-efficient feed ingredients. Until recently, China’s trade policies have helped channel demand toward DDGS and sorghum, which face relatively low tariffs and—unlike corn—are not subject to import quotas. But, so far in 2013/14, China has rejected about 1.1 million tons of U.S. corn and DDGS containing unapproved GM material, specifically the MIR 162 strain, and other shipments have been cancelled or diverted to other destinations. More recently, China has halted issuance of licenses for imports of any U.S. DDGS. These developments place prospects for U.S feed grain exports to China in 2013/14 and beyond in question. For further analysis, see China’s Market for Distillers Dried Grains and the Key Influences on Its Longer Run Potential.

Asia and Western Hemisphere propel growth in U.S. agricultural exports

Friday, June 13, 2014

U.S. agricultural exports are forecast at a record $149.5 billion in fiscal 2014 (year ending September 30), $8.6 billion above 2013, with exports to Asian and Western Hemisphere countries accounting for most of the growth. China is forecast to remain the largest U.S. market, with U.S. sales expected to rise from $23.5 billion in fiscal 2013 to $28 billion in fiscal 2014. Other Asian markets forecast to show significant growth include Hong Kong, Indonesia, the Philippines, Malaysia, and Thailand. In the Western Hemisphere, exports to Canada (the second largest U.S. market) are expected to rise marginally to $21.6 billion, while exports to Mexico (the third largest) are forecast to rise to $18.6 billion. U.S. export growth is also forecast for South America, including Brazil, Colombia, and Peru. Higher income growth and a lower U.S. exchange rate are expected to support continued growth in U.S. exports, especially within the Western Hemisphere. Although slower income growth is anticipated for China in 2014, demand for agricultural goods is expected to remain robust. This chart is based on data found in the Outlook for U.S. Agricultural Trade.

Global rice trade heading for another record in 2015

Friday, June 6, 2014

Global rice trade is forecast at a record 41.3 million tons in 2015, continuing the pattern of higher levels of global rice trade established since 2012. Recent growth in rice trade is largely based on record imports by Sub-Saharan Africa and China, moderating world rice prices, and abundant exportable supplies in Asia and the Western Hemisphere. Sub-Saharan Africa is projected to import a record 12.75 million tons of rice in 2015, with Nigeria (3.5 million tons) the largest regional—and second largest global—rice importer. China is forecast to import a record 3.7 million tons of rice in 2015, up 0.5 million tons from 2014, making it the largest global importer. Other major buyers expected to boost rice imports in 2015 include Iran, Iraq, Saudi Arabia, United Arab Emirates, and the European Union. Thailand is projected to be the largest rice exporter in 2015, shipping 10 million tons of rice, followed by India (9 million), Vietnam (6.7 million), Pakistan (3.9 million), and the United States (3.25 million). Although U.S. season average farm prices for long grain rice are forecast to be down about 10 percent in 2014/15, the recent pattern has been for U.S. rice to sell at larger premiums than Thai and Vietnamese rice. Find this chart in the Rice Chart Gallery, with additional analysis in Rice Outlook: May 2014.

China’s net grain imports surge in 2012 and 2013

Thursday, May 22, 2014

China’s demand for imported grains, much of it from the United States, has surged recently, with imports of cereal grains rising to 16 million tons in 2012 and 18 million in 2013. Imports in 2013 included 3 million tons of corn and 4 million tons of DDGS (distillers dried grains with solubles; a co-product of U.S. corn ethanol production used for feed) from the United States. In 2013, the United States supplied 70 percent of China’s wheat imports and, for the first time, China became a major market for U.S. sorghum. China’s demand for feed grains appears to have reached a turning point, as a tightening labor supply and rising feed costs force structural change in China’s livestock sector. Labor scarcity, animal disease pressures, and rising living standards are prompting rural households to abandon “backyard” livestock production and shift more production to specialized farm enterprises that rely more heavily on commercial feed. Because of this, China has switched from being a corn exporter to importing 3-5 million tons annually since 2009. Rising feed demand has also pushed up costs and motivated feed mills and livestock producers to explore new feed ingredients like DDGS and sorghum. Find this chart and additional analysis in "China in the Next Decade: Rising Meat Demand and Growing Imports of Feed" in the April Amber Waves.

Productivity drives agricultural output growth in most regions of the world

Monday, May 5, 2014

Productivity growth in agriculture enables farmers to produce a greater abundance of food at lower prices, using fewer resources. A broad measure of agricultural productivity performance is total factor productivity (TFP). Unlike other commonly used productivity indicators like yield per acre, TFP takes into account a much broader set of inputs—including land, labor, capital, and materials—used in agricultural production. ERS analysis finds that globally, agricultural TFP growth accelerated in recent decades, largely because of improving productivity in developing countries and the transition economies of the former Soviet Union and Eastern Europe. During 2001-2010, agricultural TFP growth in North America and the transition economies offset declining input use to keep agricultural output growing. By contrast, declining input use in Europe offset growing TFP, resulting in a slight decline in agricultural output over the decade. In most regions of the developing world, improvements in TFP are now more important than expansion of inputs as a source of growth in agricultural production. Sub-Saharan Africa is the only major region of the world where growth in agricultural inputs accounts for a higher share of output growth than growth in TFP. This chart is based on the table found in “Growth in Global Agricultural Productivity: An Update,” in the November 2013 Amber Waves online magazine, and the ERS data product on International Agricultural Productivity.

China's corn yields continue to lag behind U.S. yields

Tuesday, April 29, 2014

Data sources indicate that China’s corn yields continue to lag behind yields achieved in the United States (the world’s leading producer) with implications for China’s ability to meet future corn demand through domestic production. Both China’s official yield estimates provided by the National Bureau of Statistics (NBS) and alternative survey-based estimates provided by China’s National Development and Reform Commission (NDRC) show China’s average corn yields to be both lower and growing more slowly than U.S. average yields. A key factor constraining yield growth in China is slow progress in breeding appropriate varieties to build on past gains achieved from the adoption of hybrid corn. While fertilizer use is already high by world standards, improvements in pest protection and drought resistance—potentially through the adoption of genetically modified varieties—may offer yield gains. Current USDA corn supply and demand projections for China indicate that demand is likely to outpace production, leading to expanding corn imports. Find this chart and additional analysis in Prospects for China’s Corn Yields and Imports.

Yield growth supports rapid expansion of Brazilian corn production

Thursday, March 27, 2014

Rising yields have been the primary driver of growth in Brazil’s corn production since the mid-2000s. Production gains have allowed Brazil to meet rising domestic corn demand, as well as emerge as a major corn exporter. New high-yielding varieties, the introduction of GMO corn, improved cultural practices, and a shift to higher-yielding land has supported long-term yield growth. A large share of second-crop corn is planted following soybeans in the frontier agricultural State of Mato Grosso, where corn production quadrupled over the past decade. In 2011/12 and 2012/13 (March/February marketing year), above-average rains in Mato Grosso pushed corn yields and production to record levels. For 2013/14, lower corn prices caused reductions in corn area and, with the assumption of more normal weather, corn yields are forecast below the 2012/13 record. Brazil is the world’s third largest corn producer after the United States and China. Brazil became the world’s largest corn exporter in 2012/13 when the U.S. corn crop was damaged by drought, but is forecast to be the second largest exporter in in 2013/14. Find additional analysis of corn market developments in Feed Outlook: March 2014.

Net grain exports by the former Soviet Union continue to expand

Monday, February 24, 2014

Since the breakup of the former Soviet Union (FSU) in the early 1990s, the region has transitioned from major grain importer to major grain exporter, with important implications for global markets. The region was a large importer of grains—primarily wheat and corn—during the last decade of the FSU, with net imports in some years exceeding 30 million tons. Grain imports largely ceased during the 1990s, but the region emerged as a grain exporter beginning in 2001. Although FSU grain production and exports can vary significantly due to weather conditions, net exports have exceeded 50 million tons in some recent years, representing a swing of roughly 80 million tons of grain available on the world market compared with the 1980s. The vast bulk of the FSU exports are wheat, barley, and corn from the three main agricultural countries of the region – Russia, Ukraine, and Kazakhstan. The trade turnaround has occurred for two main reasons, the first being the contraction of the region’s livestock sector by about half during the 1990s following withdrawal of subsidies under the Soviet system, reducing the need for large imports of animal feed. The second factor is significant gains in grain yields and production during the 2000s, which has created surpluses for export. For more information, see Rising Grain Exports by the Former Soviet Union Region.

India's rising food subsidy leads to little change in food grain consumption

Thursday, February 6, 2014

The cost of India’s food subsidy policy has increased significantly since 2000, reaching about $13.5 billion annually in 2011/12 (April/March Indian fiscal year). The rising cost has been driven by higher support prices to farmers, unchanged issue prices for subsidized wheat and rice distributed through the government’s Targeted Public Distribution System (TPDS), and the cost of storing rising stocks. Per capita wheat and rice consumption has changed little, although TPDS grain now accounts for a larger share of consumption, potentially increasing the ability of recipients to buy other foods. Assessments of the TPDS indicate substantial leakages in the delivery of grains that have prevented many households from purchasing their full ration. India’s new National Food Security Act (NFSA), signed into law in September of 2013, aims to expand the share of households eligible for the most preferential subsidized prices and also implement a number of safeguards to improve the distribution of food grains. Whether reforms under the new legislation will have a significant impact on food and nutrition security given the historically poor functioning of distribution programs in a number of Indian states remains uncertain. Find this chart and additional analysis in “India Continues to Grapple with Food Insecurity” in the February 2014 Amber Waves.

Global soybean market outlook turns toward Brazil's large impending crop

Thursday, January 30, 2014

Although robust demand has recently supported soybean prices, the 2013/14 (October/September) soybean market outlook now hinges on the impending large crop forecast in Brazil, the world’s second-largest producer after the United States. The Brazilian forecast indicates a widening gap between soybean production and total use (crush plus exports), which may signal lower prices ahead. High prices are contributing to increased soybean area in Brazil, leading USDA to raise its 2013/14 soybean production forecast for Brazil to 89 million metric tons. The new forecast is up 1 million tons from the previous forecast, is well above last year’s record crop of 82 million, and is nearly equal to this year’s U.S. harvest of 89.5 million. Although abundant rainfall has created favorable growing conditions for Brazil’s 2013/14 soybean crop, the yield forecast is unchanged this month, with another 8-10 weeks of good weather needed if yields are to match or surpass the country’s 2010/11 yield record. While part of the increase in Brazilian supplies is expected to boost the country’s 2013/14 soybean crush and exports, the current outlook indicates a substantial increase in stocks. This chart can be found in the Oil Crops Chart Gallery, with supporting analysis in Oil Crops Outlook: January 2014.

Internationally, at-home food spending varies more than calorie availability

Friday, January 17, 2014

Per capita food-at-home spending varies widely across countries, reflecting general food price levels, prices for particular foods (grains versus meats), and for higher income countries, the mix of at-home and away-from-home spending. In poorer countries, diets consist mostly of lower cost grains, such as corn and sorghum, and roots such as cassava. In Kenya, corn makes up about one-third of total calories consumed. In 2012, food-at-home spending was $2,273 per person in the United States and $350 in Kenya. Calorie availability in 2009 displayed a narrower range from 3,688 calories per person per day in the United States to 2,092 calories in Kenya. Japanese consumers outspent U.S. consumers on at-home foods by $1,545 per person, but per-person calorie availability in Japan (2,723 calories per day) was lower. This chart appears in ERS?s data product, Ag and Food Statistics: Charting the Essentials, updated December 9, 2013.

Editor's Pick 2013:<br>U.S. agricultural exports to China grow despite increases in China's domestic farm support

Tuesday, December 31, 2013

China has been an important source of recent growth in U.S. agricultural exports, and there has been concern about the implications of recent increases in China’s domestic farm support. While it is often presumed that subsidies and price supports give Chinese farmers an advantage, these policies actually may improve prospects for U.S. agricultural exports by raising costs and prices of Chinese commodities above international levels. As a World Trade Organization (WTO) member, China agreed to relatively low tariffs and eliminated most barriers to imports apart from tariff rate quotas for several types of cereal grains, cotton, and sugar. Consequently, as China raises domestic price supports above international prices, the country tends to attract more imports. As a result, China today is a net importer of the commodities that are the main targets of its domestic support programs—grains, oilseeds and cotton. This chart can be found in Growth and Evolution in China’s Agricultural Support Policies, ERR-153. Originally published on Tuesday, August 13, 2013.

Increased productivity now the primary source of growth in world agriculture

Wednesday, December 4, 2013

The average annual rate of global agricultural growth slowed in the 1970s and 1980s but then accelerated in the 1990s and 2000s. In the decades prior to 1990, most output growth came about from intensification of input use (i.e., using more labor, capital, and material inputs per acre of agricultural land). Bringing new land into agriculture production and extending irrigation to existing agricultural land were also important sources of growth. Over the last two decades, however, the rate of growth in agricultural resources (land, labor, capital, etc.) slowed. In 2001-10, improvements in productivity—getting more output from existing resources—accounted for more than three-quarters of the total growth in global agricultural output, reflecting the use of new technology and changes in management by agricultural producers around the world. This chart is found in the ERS data product, International Agricultural Productivity, on the ERS website, updated November 2013.

Strong projected growth in global poultry meat imports

Tuesday, November 19, 2013

The United States is the world’s second largest poultry meat exporter behind Brazil, with U.S. exports valued at $4.2 billion and accounting for 20 percent of U.S. broiler meat production in 2012. According to USDA’s long-term projections, world import demand for poultry meat is expected to grow 1.56 million tons over the next 10 years. Brazil’s poultry exports—aided by relatively low production costs—are expected to grow 27 percent by 2022, compared with 11 percent projected growth in U.S. exports. Strong growth in poultry imports is projected for much of the world, except for Russia and the European Union. Continued growth is projected in the Africa and the Middle East region—including Sub-Saharan Africa, Saudi Arabia, and Other North Africa and Middle East—which now accounts for more than 40 percent of poultry imports by major importers. In this and other developing regions, rising consumer incomes, population growth, urbanization, and the typically low cost of poultry meat relative to other meats are key drivers of expanding poultry demand. This chart can be found in Assessing Growth in U.S. Broiler and Poultry Meat Exports, LDPM-231-01, released November 8, 2013.