Ms. Schneider’s China estimate of the day

Ms Schneider reckons that more than half of the world’s feed crops will soon be eaten by Chinese pigs.

That is from The Economist, via Scott Sumner, whose post is of interest more generally on numerous matters.  Scott also cites The Economist for telling us that in China smaller cities are more densely populated than larger cities.

Comments

Imagine that. And the feed is grown in virgin Brazilian Amazonian forest land, often illegally farmed.

So the only thing that can slow the Chinese economy is big increase in grain prices? So the way to stop their growth is similar to the 1974 oil embargo.

In 2022 President Rubio, Candian and Brazilian Prime Minister impose a grain embargo against China for their aggressive foreign policy with a military invasion of Valenzuela who is not paying their debts to China. The goal is hurt the Chinese pig farmers and cause Chinese pork prices to increase 50%. Although the US and Chinese President are not agreeing on the solution for the Valenzuela debt crisis, they hope the latest (fifth) peace plan will take hold.

2022: In other news, college students across Japan continue to protest the recent Chinese Nuclear testing above the Senkaku islands and the continuing Chinese blockade of Taiwan.

Does the estimate account for advances in agriculture technology? how about all this corn ethanol that we are wasting by blending into our gasoline? the US still produces so much corn that the government still needs to prop up the price of corn.

Plus most of china is still being farmed by hand plow and oxen.

Every time some "expert" makes some kind of alarmist prediction, they are proven wrong again and again. like shale oil vs peak oil.

Also bacon is worth way more than corn and grain.

Normally I would agree with you, but I am not sure you have understood the point here. Chinese people are getting richer and so eating more pork. This is good for everyone except the pigs.

So what does it matter if agricultural technology advances? Unless you are referring to pigs who grow larger and faster but eat less. Are you?

How does ethanol matter? Suppose the Feds cut all the programs propping up pointless wasteful uses of corn. The Chinese would still get rich. They would still eat more pork. More pigs would still be raised. And those pigs would still eat more corn. Their share would be larger because less would be going into car fuel.

Suppose China switches to farming with tractors and the US switches to farming with hand plow and oxen. Does it have any impact? Well, the US would be a lot poorer. But the Chinese would still be richer (well maybe not without the US consumer, but work with me people!), would still be eating more pork and so more grain would still be produced to feed those pigs. Not change to the proportion going to pigs.

I agree alarmist predictions are usually wrong. I agree bacon is worth more than corn. But the Chinese are still getting richer. They will eat more meat. That meat needs to be fed. That means even more land being turned into farms. That means more corn production. That means better lives for a lot of farmers. Everyone wins. Except those that like admiring the Brazilian rain forest from a distance I suppose. But it also means a larger share (of a larger over all level of production) of corn will go to pigs that end up being eaten by Chinese people.

@SMFS - no, the alarmist example was due to China buying pig feed from Brazil, which farms virgin rain forest to grow it. Don't you think it's a shame that the last large biodiversity hot spot will go extinct to feed pigs so Chinese can become as obese as Americans? No? Then you have no shame, literally.

Most of that Brazilian "rain forest" that is being torn up is the Patanal in Matto Grosso and not in the Central Amazon at all and it is actually basically grassland or a kind of very unphotogenic low height scrub, with lots of savannah known as the Cerrado, it is almost never shown in films because it is looks like what I am describing. Also much of that "virgin" land was previously used, if not particularily intensively, for cattle.

The famous Amazonian forest everyone imagines, and tourist see is a thousand kms away in Amazonas and Rodonia, in fact almost ever picture you see of clear cuts next to majestic foresrs is in Rodonia and is a very limited area of the areas being converted to agriculture.

You know Ray, you should really visit Mato Grosso some time it is a lot like Texas in the old days, huge, flat, extremely hot, unbelievably humid, and it's people are filled with hot air. It looks like it sounds and most of the scenery, is again like Texas, down in that it is heavily incised into the numbingly flat plateau, even its "mountains" are like this. I highly recommend the rodeo in Cuiaba, the capital, which is frankly amazing. I am from Texas, have used the word "Stampeding" at a border crossing, and my mother considers Cutting to be the peak of equestrian art, so I know what I am talking about, and it may be the most underated experience in the Western Hemisphere. It is so awesome it is almost worth a trip to Cuiaba.

I have also heard that Cuiaba supposedly has three shopping malls these days. And the food, if you love beans, meat and the color black on your melmac, Eureka!

Regarding the local women, they are generally taller, less polite, and speak much worse English than filipinas but they seem to have their charms. Keep in mind the only Americans they have ever met are all either from Iowa, pentecostals, or Doctoral candidates in sociology. Since most of the sociologists are from places like Minnesota or Urbana, I bet there is an Iowan pentecostal from Mankato State doing a survey there right now. I tell you the whole place is like a really hot and poor version of Iowa that is just overflowing with the holy spirit.

So in short, ignore the girls with really long hair and you should do great. And go to the rodeo.

Assuming that there will be continual advances in technology to make up for shortages is misguided. Look at global water supplies issues, and the pollution problems associated with nitrogen farming, for starters. Clearly there are limits to what can be sustainably produced, and there has been a lot written about that if you are too read it, rather than swipe away the opinions people who know more than you. Putative advances in technology haven't stopped meat prices from rising faster than inflation in recent years.

Sorry Relps but what shortages? Both of you seem to assume that there is some fixed amount of grain production so that if Chinese pigs are eating more, Westerners or Africans or someone else will be eating less.

Why does anyone think that?

We farm nitrogen? News to me. There are no global water shortages. There is very poorly allocated water rationing in a lot of places. China being a very good example. There may be a limit to what can be sustainably produced, but there is no reason to think we are remotely close to that yet. Most of the world has not even begun to modernize their agriculture. Look at Africa.

If meat prices have been rising it is not because of limits on production. The Chinese economy is growing so fast that some forms of production cannot keep up - it used to take longer to set up and get an abalone farm to run than it did for the Chinese economy to double. Disease hits herds. Laws change. Rising meat prices is a problem that will solve itself. As long as the governments of the world do the sensible thing and do nothing.

We farm nitrogen? News to me.

It's used in fertilizer, runoff from which has created massive dead zones in the Gulf of Meixico (which gets it from the Mississippi River)

6% of the world's natural gas is used to power the Haber-Bosch process http://en.wikipedia.org/wiki/Haber_process

"There are no global water shortages. There is very poorly allocated water rationing in a lot of places."

There are already water shortages, in California no less, created by poorly allocated resources. You are merely speculating that people will suddenly get better about managing it. http://www.nbcnews.com/news/us-news/not-one-drop-how-long-will-california-survive-life-without-n195976

"There may be a limit to what can be sustainably produced, but there is no reason to think we are remotely close to that yet."

California is running out of water because there isn't enough to grow all the crops they want, and sustain their way of life. You have no case here.

"We farm nitrogen?"

No.

"Rising meat prices is a problem that will solve itself."

With cheaper meat for everyone, and with no possible limit? How, and what makes you think so? You don't even seem to know the function nitrogen plays in agriculture.

California is not running out of water. It has plenty of water, but due to archaic water agreements and regulations, the water is subject to price ceilings and mis-allocation, hence shortages. But those shortages are superficial: 70-80% of the water used in California goes to agriculture, and prominent among California's agricultural products are crops such as rice. Think about how rice is grown, in those flooded paddies. Then think about how a large portion of California is semi-arid or literal desert. Ask yourself if it's a smart idea to grow rice in such a place.

As I say to intro econ students: don't grow bananas in Alaska. It's elementary comparative advantage; similarly don't grow rice in California.

And it turns out that other major California crops such as cotton and alfalfa are even more water-intensive than rice is.

California is no more running out of water than the planet was running out of oil back when we had oil shortages and long lines at gas stations in the 1970s. The state merely needs to stop wasting its scarce water on crops that are silly to grow in California. Achieving that agricultural changeover however will require major and politically messy reformation of state and Federal water laws and regulation. Which is unfortunate, but I believe that eventually one of these periodic water crises will force that reformation to occur.

Relps March 5, 2015 at 2:16 am

California does not have a shortage of water. It has a government that is caught between farmers who used to get a lot of water for next to nothing, and environmentalists who want to blow up every dam. It used to lean towards one side, it now leans to the other and so resources are not only misallocated, people who benefited from previous misallocation are complaining.

Even if California was a useful example, and it is not, the world is still not close to maximum production levels.

There may be a limit on how much meat we can produce. But we do not yet see any sign of it.

And I know enough about nitrogen to know we don't farm it.

So Much for Subtlety
"California does not have a shortage of water."
You are doing some very creative word play here. Of course there is a water shortage, and of course there are limits. If there were no limits, people could consume it any way they please, and they wouldn't be having the current problems. Poor allocation does not imply that there is otherwise vast production. It's also rather optimistic to assume that people will suddenly make optimal allocation choices.

"And I know enough about nitrogen to know we don’t farm it."
So then perhaps you can address the pollution problems associated with it's required use to sustain our current level of agriculture. It plays a truly important role in our crop production, and you haven't made pertinent comment on it, or its side effects.

"There may be a limit on how much meat we can produce. But we do not yet see any sign of it."
So deforestation, as one example, isn't a sign we are not sustainable with our meat production?

Ralps March 5, 2015 at 9:53 pm

No I am not. Shortages are a reflection of poor pricing. Nothing more.

No one is denying there are limits. Just that we cannot see them yet.

What problems? There is a sensible use of nitrogen. There is over use. What we need to do is make sure farmers know how much they can use without wasting it. That is not a feature of modern farming. It is a problem that is overhyped but can be solved without much trouble.

No deforestation is not a sign that we are not sustainable as far as meat consumption goes. After all, forest in the US has been growing since 1900. As it has in much of Europe. But still meat production and consumption goes up.

1 - doubtful - improvements in ag tech are almost always underestimated
1a - we actually feed all the ethanol residual - ddgs they're called (dried distillers grain) - and yes, they're being exported to China for hog feed usage - altho pigs prefer soy.
2 - so? Comparative advantage - why shouldn't they buy their grains from the US and South America?
3 - very true

I haven't seen a buffalo pulling a plow for a few years - that's one of the big differences between rural China and Vietnam. Most buffaloes in China ended up as meat after the farm mechanisation movement a few years back.

Pig farming has moved from small to mass scale. In the past pigs ate human excrement, slops, farm waste etc. Now they all eat corn - it's a distribution issue.

"Ms Schneider reckons..."

Shouldn't a rational Bayesian aggressively shrink the estimate, when it's just one person who "reckons" an a prior unbelievable fact?

Bayesian? What's the probability that alarmists gonna find alarming stuff to alarm over? (~1)

Africa produces only 30 bushels of corn per acre of farmland. Brazil manages 80 bushels while America gets 160 bushels per acre (with closer to 180/acre in parts of Iowa).

Improving African yields up to Brazilian levels would lift millions of people out of poverty and transform the continent.

Someone should work on making that happen.

Corn production or other staple crops will not be in Africa's comparative advantage for a long time. There's simply too much global competition to ever make those into major exports. Most African nations are better off focusing on smaller niche crops that they have particularly suitable climates for. Cocoa, coffee, flowers, nuts, rubber, bananas, tobacco, etc.

Africans are already growing corn in across large swaths of land. They're just doing it inefficiently. If Africa's corn growers were as productive as Brazilian corn growers, they could more than double yields, leaving plenty of additional acres for cash crops.

I'm thinking about the millions of people tilling the soil by hand, weeding by hand, harvesting by hand, watering by hand, etc.

Imagine if these people had proper tools, fertilizers and irrigation systems.

http://www.agry.purdue.edu/ext/corn/news/articles.06/images/CornYldsSince1866.gif

Indiana used to have the same crop yields as modern day Africa (30-35 bushels/acre). Then in the 1940s they learned about nitrogen fertilizer, mechanized harvesters, pesticides, etc. Now they grow five times as much food per acre. Do something similar in countries like South Africa, Zimbabwe and Mozambique and we can end poverty.

Boost African productivity? No, no, no, then environmental science professors can't assign their undergrads guilt-assignments based on the dubious "global acre".

http://www.greenchipstocks.com/articles/what-are-global-acres/551

Ah, damn it! The Bacon Gap is closing!

Wait until they find out about the General Tso's Chicken Gap!

General Tso died thinking that people would remember his heroics in battle and his cunning strategic mind as commander of the Xiang Army.

I wonder how he feels about being remembered as the tasty chicken guy.

At least Colonel Sanders was never actually an army colonel...

"Smithfield Foods" http://en.wikipedia.org/wiki/Smithfield_Foods

"Smithfield Foods, Inc. is the largest pork producer and processor in the United States,[2] as of 2013, a subsidiary of the Shineway Group (Shuanghui Group) of China."

However, http://www.chinafirstcapital.com/blog/archives/6642

"CDH, the largest single owner of Shuanghui International, is definitively not Chinese. It invests capital from groups like Abu Dhabi’s sovereign wealth fund , CALPERS, the Rockefeller Foundation, one big Swiss (Partners Group) and one big Liechtenstein (LGT) money manager, along with the private foundation of one of guys who made billions from working at eBay. So too Goldman Sachs, of course, Temasek and New Horizon."

The Economist article failed to mention that per Kg cattle has 3X the carbon footprint of that for pig.
https://publications.csiro.au/rpr/download?pid=csiro:EP103907&dsid=DS2

You need a nice big carbon footprint on your backside.

This smacks of Lester Brown, who in a 1995 book had China facing starvation because they were drinking beer and eating more meat. Yes, they're importing more, but no, China's rise has not led to a global food crisis.

For a more measured analysis you might look at Fukase, Emiko and Martin, Will (2014). "Who Will Feed China in the 21 st Century? Income Growth and Food Demand and Supply in China." World Bank, Policy Research Working Paper 6926.

China's population has peaked; they're richer and their diet with it, but that process is slowing, with over half the population now urban and the rural population aging rapidly [well, at one year per year, but in some regions the young people have all left]; and agricultural (land) productivity continues to rise due to the normal reasons, including new cultivars and more sophisticated fertilizer application. Now environmental degradation continues, as does land coversion to non-agricultural uses, while rural-to-urban migration may not be fully offset by mechanization and other means of raising labor productivity. The bottom line however is that specific crops aside -- above all soybeans -- China is not at present particularly dependent on imports, and the prospects are that will domestic grain sources will continue to be dominant.

India, central Africa, Vietnam, etc are at least 2 levels up at risk than China. http://energyskeptic.com/wp-content/uploads/2011/09/German-peal-oil-food-security-map.bmp

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