Monday, April 23, 2012

China's Hunger for U.S. Breeding Stock

This weekend I met a dairy farmer that derives part of his farm income from selling embryos from his high quality breeding stock. That by itself is not unusual in the dairy industry, but what he told me next is. He sells the embryos to buyers in China.

That is remarkable. Many United States' dairy farms have spent generations developing the world’s most efficient milking cows. China currently bans the importation of live cattle from the U.S., which is why embryos are shipped across the Pacific Ocean to start new herds in China.



Things are different with poultry and swine. Live breeder chicks and breeder hogs are shipped from U.S. farms to Chinese farms, where their improved genetics dramatically increases production. The New York Times recently explained that China’s demand for U.S. breeding stock has become insatiable:
In a country where pork is a staple, the demand for a protein-rich diet is growing faster than Chinese farmers can keep up. While Americans have cut back on meat consumption to the lowest level seen in two decades, Chinese consumers eat 10 percent more meat than they did five years ago.

China’s solution: to increase its supply by buying millions of live animals raised by American farmers as breeding stock, and capitalizing on decades of cutting-edge U.S. agricultural research.

By taking this step, breeders and exporters say, China will move from backyard farms to Western-style large, consolidated operations to keep up with demand. 
Continue Reading: From the U.S., a Future Supply of Livestock for China. The New York Times estimates worldwide, the United States exported a record $664 million worth of breeding stock to China in 2011.

United States' corn and soybean growers have already benefited from Chinese imports but stand to gain even more. The Times points out that a “more efficient livestock sector in China would cause a major shift in the global market, particularly for grain demand.” Just last week the price of soybeans jumped 28.5 cents in one day on rumors that China would increase its buying this year.

It’s hard to believe that soybeans planted in rural Indiana will make their way down the Ohio and Mississippi rivers, through the Panama canal, across the Pacific Ocean, and into China, where they will be fed to U.S.-bred hogs, poultry, and cattle. If imitation is the sincerest form of flattery, the U.S. has developed the most efficient agricultural production system in the world. It certainly puts the “local food” movement in perspective.

2 comments:

  1. Each of these excess stock buyers has different objectives and motivations.

    ReplyDelete
  2. We'll buy your excess stock! We also buy company liquidation and overstocks

    ReplyDelete

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