Spotlight on Economics: China’s Growing Demand for Meat

By Tom Wahl, Professor

NDSU Agribusiness and Applied Economics Department

China’s rapid economic growth and changing population demographics have affected
the world’s most populous country. Driven by income growth, urbanization and a
transition to a market economy, the Chinese diet has shifted from staples to
meat. Since the 1980s, Chinese grain consumption has decreased by 50 percent
while meat consumption has increased by nearly 75 percent in urban areas and by
more than 130 percent in rural areas.

This increased meat demand has resulted in significant increases in meat
production in China. China continues to lead the world in pork production but
also has increased the production of other meats and aquatic products. Much of
this increased production has been based upon increased production of soybeans
and corn but also on imported soybeans and other feedstuffs.

The demand for meat varies considerably by age, with seniors demanding much less
meat than younger populations. China’s one-child policy has skewed its
population demographics such that it has a rapidly aging population. As the
middle-aged population moves closer to retirement, the younger population will
shrink, resulting in relatively more seniors in the future.

Chinese seniors tend to eat a more healthful diet which includes more vegetables
and less meat. In addition, because many parents and grandparents live with
their children, they tend to influence the family’s eating habits, resulting in
less meat consumed at home. Thus, the aging population may have a significant
effect on the demand for meat and, hence, the demand for livestock feed,
including grain and soybeans in the future.

Recent studies suggest that total average per capita meat consumption in China
could grow from about 60 kilograms in 2010 to nearly 100 kg per person per year
by 2030. Accounting for the aging population would reduce the projection by up
to 5 percent per year.

How will this dramatic increase in meat consumption be met? Chinese meat
production likely will expand to meet this demand but will put increasing
pressure on feedstuffs and protein supplies. China’s meat imports, particularly
high-quality imports destined for the hotel/restaurant trade will likely
increase to meet a growing income driven demand.

However, given China’s limited arable land base and irrigation water supplies,
it is likely that unless productivity increases dramatically, imports of
soybeans and feedstuffs will increase significantly to feed a growing livestock
inventory. While the level of China’s imports is debatable, there is likely an
opportunity for increased exports of U.S soybeans and feedstuffs.

North Dakota is well-situated to at least partially meet some of this demand
with its expanded corn and soybean production base via northwestern ports.
However, shipping congestion may limit opportunities, at least in the short run,
making gulf exports more viable.

Nevertheless, China’s growing demand for meat will create opportunities in the
world marketplace. However, China’s population demographic changes in the next
several decades likely will reduce the overall demand for meat.

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