China’s increase in meat consumption using 3 times more grain than US ethanol industry, Biofuels Digest study reports

The change in Chinese meat consumption habits since 1995 is diverting 8.0 billion bushels of grain to livestock feed — more than the entire 2.3 billion bushel harvest used to make US ethanol.

There has been an swirling controversy over what is driving up the price of corn, and prompting the switch of soy or wheat acreage to corn in recent years.

Secretary-General Ban Ki-Moon told reporters today that “This steeply rising price of food — it has developed into a real global crisis. The United Nations is very much concerned, as all other members of the international community. We must take immediate action in a concerted way all throughout the international community.”

Most observers have concluded that failed wheat harvests, increased demand for food in India and China, and the rising use of corn for biofuel production in the US, were all factors in the rise.But how much?

China’s meteoric meat consumption increase began in the early 1980s, a trend spotted early by biofuels critic Lester Brown in his prescient “Who Will Feed China?” article. As early as 1995, annual meat consumption was increasing at a 12 percent annual rate. Consumption had been 16 kilograms per person 25 years ago, in 1983, according to the World Resources Institute.

In 1995, meat consumption was 25 kilograms per person, and reaching 31 kilograms by 1999, 50 kilograms by 2000, and is 53 kilograms per person today.

Table 1.1 China meat consumption 1995

Population in 1995: 1.203 billion
Meat consumption per capita: 25 kilograms
Total meat consumption: 30.075 million tonnes
Average kilos of grain to produce a kilo of meat: 5
Grain needed to support meat consumption: 150.375 million tonnes

Table 1.2 China meat consumption 2008

Population in 2008: 1.321 billion
Consumption per capita: 53 kilograms
Total meat consumption: 70.013 million tonnes
Average kilos of grain to produce a kilo of meat: 5
Grain needed to support meat consumption: 350.065 million tonnes

Table 1.3 Change in China meat consumption 2008

Change 1995-2008 in meat consumption: 39.938 million tonnes
Change 1995-2008 in grain consumption: 199.69 million tonnes
Kilos of corn grain per bushel: 25.5

Table 1.4 Comparison of China meat, US ethanol grain consumption change, 1995-2008
Additional bushels used to support China meat consumption change: 7.8 billion
US ethanol grain consumption, 2007: 2.3 billion bushels

Conclusion: China is consuming four times as much additional grain, since 1995, as the US ethanol industry, and demand is increasing by 615 million bushels per year. Even if the US ethanol industry were to go away overnight, in less than 4 years, China’s rising grain demand would wipe out the savings.

Policymakers have also cited to food riots in Mexico over rising tortilla prices as evidence of a distortion in the markets caused by ethanol’s demand for corn.

Table 2.1 Mexican corn consumption 1993-2007
Mexican population increase since 1993: 19 percent
Mexican corn production increase since 1993: 18 percent
Mexican corn consumption increase since 1993: 57 percent
US exports, as share of Mexican white corn (tortilla corn) market in 2007: 14 percent

Conclusion: Mexican corn production increases are keeping up with population increases, but falling rapidly behind in terms of meeting increased caloric demand. With US exports accounting for only 14 percent of the white corn market, and with US ethanol using yellow field corn, not white tortilla corn, the impact of the US ethanol industry on Mexican tortilla prices is negligible.

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