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Afghanistan emerges as major importer of wheat flour

Friday, November 15, 2013

Afghanistan is among the world’s largest importers of wheat flour, with imports growing since 2000 because of a recovery in internal demand, and inadequate water supplies that continue to limit domestic wheat production. Afghan flour production—the nation’s largest official agro-industry—faces competition from imported flour, much of it from neighboring Pakistan where wheat producers and flour millers benefit from Government support. Efforts to support Afghanistan’s flour-milling sector by increasing border protections on flour and wheat—if enforceable along the country’s rugged borders—would have uncertain impact on water-constrained wheat production, and impose higher costs on consumers. Unhindered wheat and flour imports, including imports from Pakistan, may support growth in domestic flour consumption, with relatively small losses in farm output. This chart appears in Afghanistan’s Wheat Flour Market: Policies and Prospects.

Cerrado region remains key to growth in Brazil's farm output

Monday, September 16, 2013

The successful agricultural transformation of Brazil’s Cerrado, a broad savannah that accounts for 24 percent of the country’s total area, has driven past growth in farm output in Brazil and is likely to remain important to future growth. The average output of Cerrado farms increased 192 percent in volume terms between 1985 and 2006. By 2006, Brazil was the second-largest global producer of soybeans after the United States, with 49 percent of that production coming from the Cerrado. The Cerrado’s tropical soils, with good physical structure but low fertility, high acidity, and susceptibility to degradation, are generally deficient in important nutrients, but improved varieties and management practices developed by Brazilian research institutions were central to making crops and pastures more productive. ERS research examining productivity across Brazilian environmental zones—or biomes—indicates that average farms in the Cerrado achieved a total factor productivity (TFP—a measure of total output to total input) growth rate of less than 1 percent per year between 1985 and 2006, far less than the 4.3 percent achieved by the biome’s most-efficient farms. This productivity gap suggests considerable room for continued output growth for most farms in the region. This chart can be found in “Evaluating the Resource Cost and Transferability of Brazil’s Cerrado Agricultural ‘Miracle’” in ERS’s September 2013 Amber Waves magazine.

China's agricultural subsidies rise following establishment of general-input subsidy program

Monday, August 26, 2013

China’s expansion of agricultural support is driven by a mix of factors, including a campaign to “modernize” agriculture by inducing adoption of modern inputs and increased investment, concerns about rural-urban income inequality, and concerns about maintaining “food security.” Growth in subsidy payments reflects the strategy of increasing subsidies annually. Most of the growth in payments is in the “general-input subsidy” that aims to offset rising production costs in order to maintain net returns to grain producers. From 2004 to 2012, the direct payment to grain producers grew marginally. During the same period, the improved-seed subsidy increased tenfold to $3.4 billion by adding more crops and extending the geographic coverage of the program. The machinery-purchase subsidy was increased by an even greater margin, reaching $3.1 billion in 2012. However, increase in expenditure on the general-input subsidy exceeded the combined growth of these other subsidies and it was the dominant type of direct-subsidy expenditure in 2012. Central Government policies describe a “dynamic adjustment mechanism” indicating that the general-input subsidy is determined by increases in prices of grain, fertilizer, fuel, and other inputs to keep net returns to grain producers from falling. This chart can be found in Growth and Evolution in China’s Agricultural Support Policies, ERR-153.

Labor costs drive increases in costs of grain production in China

Tuesday, August 20, 2013

Available Chinese data indicate that average cash expenses rose during 2003-11 by $190 to $220 per acre for corn, wheat, and long-grain rice, while expenses for short-grain rice rose by nearly $400 per acre. While discussion tends to focus on increases in cash expenses for inputs like fertilizer and fuel, the increase in production costs has been more broadly based. The data show that the implicit cost of unpaid family labor was the dominant component of farm production costs. The imputed cost of family labor rose from $94 per acre to $244 per acre during 2003-11, a reflection of rising wages and opportunity costs of farm labor. Other inputs that are the object of subsidy programs—seeds and mechanized services—also contributed to increases in production costs. Overall, the increases in production expenses far exceeded the increase in subsidy payments during that period. Growth in off-farm work opportunities poses the biggest challenge to maintaining agricultural output. As prospective off-farm wages rise, farmers require higher net returns to induce them to continue planting crops or raising livestock. This chart can be found in Growth and Evolution in China’s Agricultural Support Policies, ERR-153.

U.S. agricultural exports to China grow despite increases in China's domestic farm support

Tuesday, August 13, 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.

China's agricultural support program is expanding

Monday, August 5, 2013

China’s agricultural support program began in 2004 when it introduced three small subsidies targeted at grain producers: a direct payment, a subsidy for improved seed varieties, and a partial rebate for farm machinery purchases. The Government’s direct role in grain markets was reduced to an indirect one of buying and selling reserves to maintain food security and stabilize prices. Since 2004, expenditure on the initial set of programs has grown rapidly and new ones have been added. China’s support for agriculture is now large and wide-ranging. In 2012, China’s Ministry of Finance reported budgeted spending for agricultural production rose to $75 billion, equal to $127 per metric ton of grain produced. The programs shown in this Chart of Note accounted for about half of that total. Other major expenditures included $9.8 billion for subsidized loans and storage of commodity reserves and $17.3 billion for irrigation/water projects and onfarm infrastructure. Smaller amounts were spent on agribusiness support, drought mitigation, and technical services. This chart can be found in Growth and Evolution in China’s Agricultural Support Policies, ERR-153, August 2013.

Strong expansion seen for Brazil's soybean exports after big crops

Monday, July 15, 2013

Although the USDA estimate of Brazil’s record 2012/13 soybean crop has been lowered to 82 million tons, strong expansion of Brazil’s soybean exports is forecast for 2012/13 and 2013/14. Brazil’s soybean exports are forecast to surpass those of the United States in both 2012/13 and 2013/14, making Brazil the world’s largest soybean exporter in both years. Despite lower yield expectations for the 2012/13 crop, export prospects have improved as extended weekday operations at major ports have trimmed a backlog of soybean exports. As a result of the enhanced capacity, soybean exports for the country set a monthly record in May at 7.95 million tons and more large monthly shipments are expected to follow. USDA forecasts Brazil’s 2012/13 soybean exports at a record 37.9 million tons and 2013/14 exports at another record of 41.5 million tons. This chart is adapted from one found in the Oil Crops Chart Gallery.

China has emerged as the world's dominant importer of soybeans, bolstering demand for U.S. exports

Tuesday, May 21, 2013

Rising incomes in China have led to a major shift in Chinese diets to include more livestock products. This dietary change, along with policy measures to spur growth in the industrialized feed industry and modern livestock production, has supported remarkable growth of soybean imports used to feed Chinese livestock while Chinese soybean production has been declining in favor of corn and rice production. The elimination of raw soybean import quotas and a surge in foreign investment in the Chinese soybean processing sector following China’s accession to the World Trade Organization (WTO) in 2001 facilitated soybean imports from the United States and other world suppliers. The bulk of soybeans produced in China are for human consumption, while soybeans from the United States and South America, China’s two primary import sources, are crushed for feed and commercial oil uses. China has more than a 60-percent share of global soybean imports. This chart is found in the June Amber Waves article, “Crop Outlook Reflects Near-Term Prices and Longer Term Market Trends.”

Agricultural productivity improving in Sub-Saharan Africa, but very slowly

Monday, February 25, 2013

Agricultural productivity growth is a critical factor in controlling the economic and environmental costs of feeding the world’s growing population. New ERS research finds that agricultural productivity in Sub-Saharan Africa has been growing by about one percent per year since the 1980s. A major driver has been adoption of new agricultural technologies developed through agricultural research. Investment by the CGAIR Consortium of international agricultural research centers has been particularly important, providing about $6 in productivity impacts for every $1 spent by these centers on research. However, rates of new technology adoption and agricultural productivity in Sub-Saharan Africa are still low relative to other developing countries. Resource degradation, policies that reduce economic incentives to farmers, the spread of HIV/AIDS, armed conflicts, and low national research and extension capacity have hindered agricultural productivity improvement in the region. This chart is based on the ERS report, Resources, Policies and Agricultural Productivity in Sub-Saharan Africa, ERR-145, released February 2013.

Increased China corn production boosts 2012/13 global output

Wednesday, January 23, 2013

World coarse grain supplies for 2012/13 were projected higher in December, mostly due to a large record corn crop reported for China. USDA projects China’s corn crop at 208.0 million tons, up 8.0 million tons from the previous forecast. With this revision, China’s 2012/13 corn crop is projected to exceed the previous year’s record by 8 percent. The record crop, also forecast by China’s National Bureau of Statistics (NBS), is supported by economic information, weather data, and satellite imagery. NBS reported a record 34.95 million hectares of corn harvested in 2012/13, a 4-percent increase from the previous year. Price conditions at planting favored corn over alternative crops, especially soybeans or cotton, and favorable growing conditions limited crop losses. Corn area expansion has been strongest in the two northernmost provinces, Heilongjiang and Inner Mongolia, and temperature and rainfall conditions were favorable in these regions. This chart appears in ERS’s Feed Outlook: December 2012, FDS-12l.

Brazil is now the world's leading exporter of soybeans and soybean products

Wednesday, December 19, 2012

In recent years, Brazil’s production of soybeans and soybean products have risen sharply as most areas of Brazil have seen rapid increases in area planted to soybeans and rising yields. Relatively high profits for soybean producers are expected to lead to an average increase in planted area of about 2 percent per year over the next decade, with increasing soybean plantings in the Cerrado region and expansion extending into the Legal Amazon region of Brazil. Brazil’s soybeans and soybean product exports have also increased significantly and are projected to continue doing so during the next ten years, making the country the world’s leading exporter of soybeans and soybean products, ahead of the United States and Argentina. In 2011, Brazil accounted for slightly more than 32 percent of world trade in soybeans and soybean products, as income and population growth in China, other Southeast Asia, Latin America, North Africa, and Middle Eastern countries contributed to rising demand for soybean and soybean product imports. This chart is an update of one found in the Brazil topic on the ERS website.

Per capita food spending varies more internationally than per capita food availability

Tuesday, November 27, 2012

Per capita food-at-home spending differs widely across countries. For example, in 2011 food-at-home spending was $2,239 per person in the United States, $452 in lower middle-income Cameroon, and just $276 in low-income Kenya. However, higher food spending does not always translate into higher food consumption. South African consumers, for example, spent more per person on at-home foods than Chinese consumers, but per person calories available for consumption were about the same in both countries. Japanese consumers outspent U.S. consumers on at-home foods, but per person calorie availability in Japan was lower. At-home food spending reflects general food price levels, prices for the particular foods purchased (grains versus meats), and, for higher income countries, the mix of at-home and away-from-home eating. While the average consumer in the United States spends more than 8 times as much on food at home as the average person in Kenya, per capita calorie availability is less than 80 percent higher. All eight countries had per capita calorie availability over 2,000 per day, but averages can mask large differences in food spending, access, and consumption within a country. This chart is based on data from the ERS Food Expenditures data product, updated October 2012.

Residents of low-income countries devote a greater share of their total spending to food

Tuesday, November 20, 2012

At-home food spending as a share of consumption expenditures varies between countries, with higher income countries spending a relatively small share and lower income countries spending a larger share. The United States has the lowest at-home food spending share and Cameroon one of the highest. Consumption expenditures include personal spending on goods and services in the domestic market. As incomes rise, food spending typically increases in absolute terms, but declines as a share of total consumption expenditures. Between 2008 and 2011, food spending as a share of consumption expenditures remained relatively flat in both the United States and Japan. Food spending's share in the other six countries fell during this time, especially in India which saw large increases in income and total consumption expenditures. This chart is based on data from the ERS Food Expenditure Series data product, updated October 2012.

Improvement in agricultural total factor productivity is highly variable among and within countries

Tuesday, November 13, 2012

Estimates of agricultural total factor productivity (TFP) growth vary widely among and within countries. In China, TFP growth is strong in coastal areas but less so in the interior. Brazil has robust TFP growth in coastal areas and in some parts of the interior where soybeans and cotton are now produced. Productivity growth is concentrated in the western and northern regions of Indonesia where production of export commodities like palm oil and cocoa is expanding rapidly. In the United States, productivity growth is moderately strong in the Corn Belt and Lake States but low in the Plains States, Appalachia, and major horticultural States of California and Florida. While a few countries in Sub-Saharan Africa are experiencing growth, others are recovering from earlier decades when their agricultural sectors suffered from the effects of war. Raising agricultural productivity growth in Sub-Saharan Africa will likely require significantly higher public and private investments, especially in agricultural research and extension, as well as policy reforms to strengthen incentives for farmers. This chart appears in "New Evidence Points to Robust But Uneven Productivity Growth in Global Agriculture" in the September 2012 issue of ERS's Amber Waves magazine.

U.S. beef imports from Mexico doubled in each of the last 2 years

Friday, November 9, 2012

Mexico has historically been a top export market for U.S. beef, but in 2003, it emerged as an important source of beef imports for the United States. In 2011, Mexico exported 59,000 metric tons of beef to the U.S., making it the fourth largest source of U.S. beef imports. The volume of boneless, fresh, or frozen meat cuts exported from Mexico to the U.S. increased by nearly 68 percent from 2010 to 2011, while the volume of exports of Mexican bone-in beef cuts increased by nearly 59 percent. The increase in exports of Mexican beef to the U.S. is partly due to an increase in the number of TIF (Tipo Inspeccion Federal) plants inspected by Mexico's Federal Government. Such plants must meet standards similar to those in the U.S. and must inspect meat that is moved across State borders in Mexico or exported to the U.S. In the last 60 years, the number of operational TIF establishments increased from 15 to 365 across 27 States in Mexico and has grown rapidly in the last few years. This chart appears in "Mexico Emerges as an Exporter of Beef to the United States" in the September 2012 issue of ERS's Amber Waves magazine.

China's livestock industry is using more commercially manufactured feed

Tuesday, October 16, 2012

China imports distillers dried grain with solubles, a co-product from corn-based ethanol production, for use by commercial feed compounders who combine various ingredients to meet the nutritional needs of livestock at minimum cost. Traditionally, Chinese animals and poultry were fed household and processing wastes, crop byproducts, vines, tubers and forages, but the use of feed grains, oilseed meals, and feed additives has increased rapidly since the 1980s. China's commercial feed production rose from under 36 million metric tons in 1991 to 169 million metric tons in 2011. China's 5-year plan anticipates that commercial feed production will grow to 200 million metric tons in 2015. The projected annual increase of 4.7 percent is much faster than the projected growth in livestock and poultry output. This rapid growth reflects a shift from traditional feed sources to commercial feed in China's livestock industry. This chart is found in China's Market for Distillers Dried Grains and the Key Influences on Its Longer Run Potential, FDS-12g-01, August 2012.

Quantity of agricultural laborers in Brazil is on the decline

Thursday, October 11, 2012

The Brazilian agricultural sector has shed a significant portion of its labor over the previous 20 years, reflecting a rural-to-urban migration, improved agricultural productivity, increased agricultural output, and a transition to more capital intensive agricultural production. Agricultural labor counts are recorded in Brazil's censuses as either family or hired labor, and each category has declined over the last three census periods. Between 1985 and 2006, hired labor counts declined by 26 percent, as did family labor, which is noteworthy given the large number of family laborers in Brazilian agriculture relative to hired laborers and implies a substantially greater absolute decline in family laborers. In 1985, family and hired labor accounted for 16.7 million and 4.8 million laborers, respectively. By 2006, family labor had fallen to 12.4 million laborers and hired labor to 3.6 million laborers. This chart comes from Policy, Technology, and Efficiency of Brazilian Agriculture, ERR-137, July 2012.

United States is leading source of agricultural imports for Indonesia

Friday, September 14, 2012

The United States was Indonesia's largest source of imported agricultural products in 2010, supplying about 20 percent of the total value of Indonesia's agricultural imports. Imports of traditional foods (chiefly soybeans) make the largest contribution, and the U.S. dominance of Indonesia's soybean imports should be considered a long-term strength. Even though soybean food consumption will not grow rapidly in the future, Indonesian soybean production has been declining, and imported soybeans will remain important in traditional foods such as tofu and tempe, and also in newer products like soymilk. The relatively low U.S. share of other food, beverage, and food-related products is to some extent caused by the great geographic distance (and subsequently higher transportation costs) between Indonesia and the United States, in contrast to nearby Australia and the Association of Southeast Asian Nations (ASEAN) countries. This chart comes from Indonesia's Modern Retail Sector: Interaction With Changing Food Consumption and Trade Patterns, EIB-97, June 2012.

Record high prices to stimulate more soybean area in Brazil

Tuesday, September 4, 2012

Despite a large decline in the U.S. crop, global soybean production in 2012/13 is expected to increase to 260.5 million metric tons from 236 million in 2011/12 based on large gains in South America. By July, soybean prices in Brazil had surged nearly 50 percent compared to a year earlier. Brazilian producers are expected to respond to these incentives with a 10-percent increase in soybean area for 2012/13 to 27.5 million hectares. A larger cropland base is projected to raise Brazil's soybean production to 81 million tons—up 3 million from July's forecast. If realized, Brazil's 2012/13 soybean crop would be the first ever to surpass the U.S. harvest. A Brazilian soybean crop of this magnitude could push the country's 2012/13 exports to a world-leading 37.6 million tons. This chart is found in the August 2012 Oil Crops Outlook, OCS-12h.

Staple foods make up a large share of calories and food expenditures for Afghan households

Thursday, August 23, 2012

Increases in the prices of staple foods can have serious effects for households living at or near subsistence levels. Over the past few years, increases in global food prices have led to an erosion of purchasing power in many developing countries, where the poor often spend the majority of their budgets on food. Staple foods make up 50 percent of household food expenditures and 71 percent of daily calorie intake in Afghanistan. Wheat flour, which doubled in price between December 2007 and July 2008, is the primary staple food in Afghanistan; it alone accounts for 54 percent of daily calories per capita and 35 percent of household food expenditures. The differences in the calorie and expenditure shares reflect price differences between food groups. The cheapest foods--in terms of calories per Afghani (the local currency)--are grains and pulses. For 1 Afghani (approximately 2 cents), a household can purchase approximately 184 calories of wheat flour, 106 calories of lentils, or 78 calories of rice. In contrast, meat and vegetables are the most expensive; one Afghani purchases only 9 calories of beef or 10 calories of cucumber. These charts are found in the ERS report, International Food Security Assessment, 2012-22, GFA-23, July 2012. Additional information can also be found in "Rising Food Prices and Declining Food Security: Evidence From Afghanistan" in Amber Waves, September 2011.