Japanese consumers are among the world’s most demanding in their expectations for safety, quality, taste, and value in the food products they purchase. Reminding these consumers that U.S. beef meets all these criteria and rebuilding demand after a two-and-a-halfyear absence from the market will require careful marketing, safety assurances, rebuilding of trade relationships—and adequate supplies. In the months following the reopening of the Japanese market to U.S. beef, importers were expressing frustration that they were unable to obtain enough U.S. beef to meet demand, even at the very low volumes needed for a slowly expanding, very cautious market.

The continuing strong expansion of the ethanol industry has raised questions about the availability and price of corn over the next few years. Will Corn Belt states continue to produce enough surplus corn to meet all the traditional users in other states and in the rest of the world? Based on ethanol industry announcements, the United States could have up to 12 billion gallons of ethanol production capacity during the 2008/09 crop year. With a typical ethanol conversion rate of 2.75 gallons of ethanol per bushel of corn, 12 billion gallons of ethanol translates into 4.4 billion bushels of corn. To see how the expansion of the ethanol industry is changing the flow of corn across the United States, we have estimated state-level domestic surplus corn, which is the amount of corn remaining in a state after accounting for ethanol, livestock feed, and other processing in the state. To do that, we estimated corn usage for ethanol and livestock feed by state and combined those estimates with figures on corn processing for non-ethanol purposes from ProExporter and corn production numbers from USDA. Domestic surplus corn is corn that is either maintained in stocks or available for export to other states or countries. We estimated domestic surplus corn for 2004 and for a projection of 2008.

Over the last two decades, urban Chinese consumers have dramatically increased their consumption of meat, other livestock products, and fruits and have decreased consumption of grainbased foods. China’s per capita grain consumption declined from 145 kilograms in 1981 to 78 kilograms in 2004 in urban areas, whereas the per capita consumption of meats, eggs, and aquatic products increased respectively from 20, 5, and 7 kilograms in 1981 to 29, 10, and 12 kilograms in 2004. As signifi cant changes in food consumption patterns in urban China are noted, it is natural to ask: Are consumer responses to price changes and income growth entirely responsible for the transformation in food consumption in urban China, or have consumers in urban China changed their preferences for foods? Our recent CARD study examined the empirical evidence for structural change in urban diets in China. The study’s fi ndings may be good news for U.S. food industries seeking entry into the Chinese market.

Two ethanol plants are exploring the possibilities of linkages between ethanol and livestock production. The E3 BioFuels plant in Mead, Nebraska, and the Panda Ethanol plant in Hereford, Texas, are trying to take advantage of the synergies between ethanol and livestock production. These two plants are also testing whether cost advantages in ethanol production still exist for the Midwest or whether there may be advantages in locating ethanol production closer to end users for both ethanol and ethanol by-products, specifi cally distillers grains.