From China to America, monumental forces are driving global demand for food, feed and renewable fuel. Faced with a worldwide credit crunch, demand will probably take a breather, but the long-term trends are still strong.

Meet Your Chinese Customers
A dynamic economy means better diets for millions and improved markets for American farmers.
Story and photos by Jim Patrico

Middle class
The Chinese economy has experienced double-digit increases for the last three decades. Access to the WTO in 2002 accelerated China's impact on world markets. Today, it is arguably the world's leading consumer of concrete, coal, steel, petroleum and—of special interest to U.S. farmers—grain and meat. And, while a disproportionate amount of the wealth in China remains in the hands of a few, a strong middle class has emerged, people who have enough income to buy expensive clothes, automobiles and, yes, meat for the dinner table.

Sun Rongjian, 34, has made it to the middle class. He moved from a rural village to Beijing 17 years ago and now works as a mid-level manager and salesperson of agricultural chemicals for Da Dei Nong Group, the largest feed premix and farm supply company in China. Sun's wife, Zhao Xiuling, works for the same company. Between them they bring home more than $28,750 a year.

The Suns and their five-year-son, Sun Jiamu, live in a high-rise building in a ground floor apartment they bought six years ago for $52,000. The ground floor is prestigious because it comes with a small courtyard. Their neighbor's courtyard is neatly planted in vegetable. Sun says ruefully that the weeds in his courtyard reflect how busy his job keeps him; he travels too much to care for a garden.

The apartment has big rooms: two bedrooms, a living room/dining room, kitchen and a washroom, which holds a toilet, shower and small washer/dryer. On this night, Sun is taking his family to a hot pot restaurant, a raucous place a few blocks away where families and friends sit around round tables in the centers of which are brass boilers filled with charcoal. Around each boiler is a trough filled with steaming water. Waiters and waitresses bring raw meats and vegetables to the tables and customers throw them into the water to cook. They pull the cooked food out in a few minutes and feast. A lot of wine and beer also occupies space on the tables.

Sun says with a touch of pride that he eats meat almost every day. In his home village, meat was a rare meal; his family had pork only on New Year's.

Life in Beijing has been good. But Sun and his family do not yet have permanent residents status, although he hopes they will one day. In the meantime, he pays $1,500/year to send his son to school. He want his son to go to university. Once he gets a degree, permanent resident status will be his.

The next day at Sun's office, his boss, Fu Peizheng, assistant president of DBN, talks about China's middle class and its appetite for better foods. Fu is a soft-spoken thoughtful man, who is well-dressed and obviously successful. He does elaborate ink on rice paper graphic arts in his spare time. Fu says that China's middle class is stable but is also sensitive to fluctuations in the world economy. As food prices have risen recently, some in the middle class have chosen to eat less pork and more poultry and fish, which are less expensive. Such adjustments are normal. But, Fu says through an interpreter, "China will keep eating pork. Our company (premix feed) sales are increasing every year."

He says that his company's pork producing customers are savvy to market cycles. If those cycles hold, China is near a peak for pork production and may see a slump beginning in 2009. But it will be a temporary retreat, something that Fu sees every three years. On the other hand, demand has been so high, pork consumption might not slump as much as expected and market forces could establish a new cycle.