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Asian Markets Will Benefit Ag in 2012


As global demand for U.S. agricultural products continues to grow, American farmers can expect to see an increasing number of opportunities in China and other Asian markets in 2012, according to William Westman, Vice President for International Trade at the Meat Institute, speaking at the American Farm Bureau Federation’s 93rd Annual Meeting.


“There are tremendous opportunities in China,” said Westman. “You have four times the population of the United States on two-thirds the size of the land and 225 cities anticipated to have populations of at least 1 million people by 2025. And just like us, they want what is best for their families. They want safe food and, with their emerging middle class, they now want more proteins and higher quality food.”


China also has more than $3 trillion in foreign exchange reserves and is starting to use it. The country’s agricultural production isn’t adequately keeping pace with its rapidly growing population, even in areas where farmers are producing multiple crops per year on intensively utilized land.


Westman explained that the Chinese government is trying to improve the nation’s agricultural infrastructure and productivity by investing in new technologies, heavily subsidizing machinery and changing the efficiencies of the way farmers plant and harvest crops. However, water shortages in northern portions of the country hinder this progress and make the nation increasingly dependent on agricultural imports.


“China is our largest market for ag exports in all commodities and our trade with the country is up more than 1,000 percent since 2002,” said Westman, “But this remains one of the world’s most challenging markets. Even as interest in U.S. commodity exports rises, the Chinese government is going to continue to invest primarily in pork and poultry.”


The consumer market in China is shifting, too. Consumers are not only concerned about the quality of the food they are buying, but are also increasingly demanding high-quality presentations for that food. This becomes more apparent when factoring in the number of five-star hotels opening in China – and could become the missing piece needed for U.S. beef exports to succeed.


“The demand for our beef is accelerating in north Asia, but we have to have patience,” said Westman. “Our U.S. products have a wonderful image in China. They want what we are producing, but, for now, pork and poultry still reign.”