Iowa Ag Review: Volume 10, Issue 3
Recently, a World Trade Organization (WTO) panel ruled on a dispute between Brazil and the United States. The dispute, filed by Brazil over cotton subsidies, accused the United States of lowering world agricultural prices and distorting agricultural trade flows through various forms of agricultural support. Preliminary findings, as reported by major news sources such as CNN, the New York Times, and the Economist magazine, indicate that the WTO panel agreed with most of Brazil’s case. The results of these findings and the ongoing WTO agricultural trade negotiations could have a dramatic impact on the ways agriculture can be supported by the federal (and state) government. And these possible changes in support could affect production agriculture in Iowa.
I owa is the center of the world’s most productive corn and soybean region. Along with Illinois and Indiana to the east, Minnesota and South Dakota to the north, Nebraska to the west, and Missouri to the south, this region produces an abundance of low-cost feed that when used by the highly efficient U.S. meat and dairy sectors provides consumers with low-cost food. The traditional view of agriculture in this region is one in which domestically produced grain is fed to domestically produced livestock that is slaughtered for domestic consumption. The surplus grain is then exported to support domestic livestock sectors in other countries.
A relatively small amount of arable land, high population density, and high land and labor costs in several E.U. countries make it difficult for many families to stay on farmland that has been handed down for generations. Direct government help is limited because the European Union is under pressure to reduce agricultural subsidies. As part of the policy package developed to address these issues, the European Union has created incentives for producers to add value to agricultural production by participating in agritourism.
China has one of the lowest levels of per capita milk consumption in the world, averaging just 5.6 kilograms (kg) per year in 2003. Consumption varies greatly by region, income level, and household location (rural or urban). Throughout the mid-1980s and early 1990s, milk consumption in urban China was stagnant, at about 4.8 kg per person, and rural consumption hovered at just 0.6 kg per person. While rural per capita consumption of dairy products grew weakly in the late 1990s, urban consumption of fresh dairy products has grown an average of 25 percent annually since 1997, reaching 15.7 kg per person in 2002. Household purchases of fluid milk, yogurt, milk powder, and ice cream are growing rapidly, and away-from-home consumption of cheese has risen with the tide of investment by western-style restaurant chains. The spectacular expansion of China’s urban market for dairy products is driven by a combination of technology adoption, changes in retail supply chains, consumer trends, income growth, and government policies. This article summarizes findings on Chinese urban dairy markets emanating from a large CARD research project that analyzes Asian dairy markets.