How Has China's Agricultural Product Consumption Changed? A Perspective from Food

According to the report of the 18th National Congress of the Communist Party of China, to draw a specific scenario: by 2020 China will have built a moderately prosperous society in all respects, and by 2027 China's urbanization level will approach 70%. Industrialization entering the middle and late stages means that people's lives will be more affluent and all social undertakings will enter a new stage. One important sign of this is that food consumption will achieve a high-level equilibrium, specifically manifested as animal-based food consumption reaching a dynamically stable peak level. In this process, constrained by China's domestic resources, environment and other conditions, on the one hand it is necessary to make use of both the domestic and international markets and both domestic and international resources, and on the other hand it is necessary to dilute the risks caused by the concentration of China's agricultural product import sources resulting from the traditional reliance on feed imports. In the long run, the global food market will remain relatively stable, and with technological progress and the improvement of global production efficiency, the real prices of agricultural products, including livestock products, will tend to decline.

Rapidly Growing Consumption of Agricultural Products

With China's rapid economic growth and the continuous rise in the income levels of urban and rural residents, the consumption of agricultural products by Chinese residents has shown a new situation of rapid total growth and rapid structural upgrading.

1. Rapid growth in the total consumption of agricultural products by residents

From the perspective of food, over the past 30-plus years, per capita and total consumption of staple grains and sugar has basically reached its peak, and the demand for vegetable oil consumption has entered a period of rapid growth and is gradually approaching its peak. Specifically, China's total demand for vegetable oil consumption increased from 11 million tons in 1998 to 26 million tons in 2014, with an average annual growth of nearly 5.5%. Per capita vegetable oil consumption increased from 8.8 kg in 1998 to 19.3 kg in 2014, exceeding the world per capita consumption level of 16 kg and gradually approaching the per capita consumption level of 25 kg in developed countries.

2. Rapid upgrading of residents' food consumption structure

Thanks to economic growth and rising income and urbanization levels, residents' food consumption structure (in this article the concepts of food and foodstuffs are equivalent) has upgraded rapidly. While the consumption of starch and fiber foods has remained stable, the consumption of animal-based foods has grown rapidly. According to statistics released by the National Bureau of Statistics, in 2014 China's total meat output was 87.07 million tons, poultry egg output was 28.94 million tons, milk output was 37.25 million tons, and aquatic product output was 64.5 million tons, with the total output of meat, eggs, milk and aquatic products reaching 218 million tons. In 1996, China's total output of meat, eggs, milk and aquatic products was 100 million tons, an increase of 1.1 times over 18 years, while the population increased by only 12% over the same period, and the per capita animal protein availability roughly doubled.

The rapid growth in animal-based food consumption brought about by the upgrading of the food consumption structure has led to rapid growth in the demand for feed grain. Taking corn as an example: from 2003 to 2014, China's corn output grew from 116 million tons to 216 million tons, an increase of 100 million tons, with an average annual growth of 6.4%; over the same period, domestic corn consumption grew from 117 million tons to 170 million tons, an increase of 45.3%, with an average annual growth of 3.8%. In fact, before 2012, the growth rate of domestic corn consumption was consistently higher than the growth rate of production, making China a net importer of corn; after 2014, due to sluggish overall demand, the growth rate of corn consumption declined, but on the whole this did not change China's status as a net importer of corn. In addition, demand for feed such as sorghum and barley also grew rapidly.

Measurement of Overall Consumption

In order to measure the changing characteristics of China's total food consumption, it is necessary to construct an abstract indicator of total food consumption. This article uses the relationships among the Engel coefficient, income and prices to construct a total food consumption index to evaluate changes in overall average food consumption.

Specifically, if it is assumed that the food consumption basket of urban and rural residents is a whole, this abstract concept of food consumption corresponds to the food consumption price index, and the derived food consumption index is comparable over time series. If the consumption of urban and rural residents in 1983 is taken as the base of 100, then in 2013 China's residents' food consumption index was 295.7, an increase of about 2 times; over the same period, the urban residents' food index grew from 100 to 362.5, an increase of 2.6 times, and the rural residents' food index grew from 100 to 218.1, an increase of 1.2 times. Overall, the increase in urban residents' food consumption was faster, which is due both to the effect of income growth and to the contribution of urbanization.

From the perspective of verifying the index, macro data can be used for a rough comparison: in 1983 China's per capita grain output was 376 kg, and in 2013 it was 443 kg, an increase of 17.8%; in 1983 China's per capita meat output was 13.6 kg, and in 2013 it was 62.7 kg, an increase of 360.8%; in 1983 China's per capita aquatic product output was 5.3 kg, and in 2013 it was 45.4 kg, an increase of 756%. Comparing this with the food consumption index, meat consumption played the largest role in the growth of total food consumption. From the growth data for 1983-2013, meat consumption grew by 3.6 times, which is relatively close to the growth of the food consumption index. It can be roughly inferred that the weight of meat consumption expenditure accounts for a relatively large share of the overall food consumption index, which is consistent with actual sensory perception and also relatively consistent with the overall trend of changes in China's food consumption structure, namely that the growth of animal-based foods occupies the dominant position.