Category Archives: china

Environmental Impacts of Exporting Dry Milk Powder


Photo by Ansel Adams. The Tetons and the Snake River (1942) Grand Teton National Park, Wyoming. National Archives and Records Administration, Records of the National Park Service.
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In the volumes of agricultural reading that I do, I have not run across a more scathing article about industrial agriculture than a recent feature story in High Country News. The article was about the environmental damage that has been done to water and waterways in Idaho due to its burgeoning dairy industry. The economic gains which are derived from this industry are, unfortunately, often outside the local Idaho communities which are negatively impacted, and sometimes even go to foreign-owned companies. This goes on largely for the purpose of exporting dry milk powder to nations such as China. If you think of Idaho as having pristine rivers, or as being immune to Big Ag, think again.

The article, “Idaho’s sewer system is the Snake River – As Big Ag flourishes, this massive waterway suffers.“, was written by Richard Manning. I do encourage you to read it. The overall issues, as I see it, are repeated across other states and also relate to other aspects of Big Ag. You name the subject. You name the state.

There is an environmental price to pay in subsidizing milk production for export abroad. What about New Zealand, the “Saudi Arabia of Milk”, are they experiencing problems with their waterways, too, just as Idaho? And, the EU is readying to ramp up its milk exports, too, after a 30-year milk-export quota expires this coming March 31st. Here, in the U.S., the new 2014 farm bill has greatly increased its subsidized protection of our dairy industry which probably means growth will continue in this lucrative milk powder export market.

When China thirsts for a safe milk product, the world responds.



ADDENDUM:
1. Here is a graph of our growing exports of dairy/dry milk from the USDA:

U.S. commercial exports of dairy products have grown since 1995, accounting for an increasing share of the total commercial disappearance of U.S milk production. On a milk-equivalent skim-solids basis (a method of adding up quantities of diverse milk products based on their skim-solids content), U.S. commercial exports grew on average 11.8 percent per year between 1995 and 2013, with their share of total commercial disappearance rising from 3.4 percent in 1995 to 18.7 percent in 2013. Commercial exports of nonfat dry milk (NDM) and skim milk powder (SMP) played a major role in this increase. In recent years, major U.S. markets for NDM and SMP have been Mexico, China, Philippines, and Indonesia. Domestic commercial disappearance serves as a proxy for U.S. consumption, calculated as a residual after accounting for production, on-farm use, imports, exports, and changes in stocks. The commercial data also exclude USDA net removals (price support purchases plus subsidized exports minus sales to the commercial market) which were significant in earlier years but a minor factor since 2004.

2.

U.S. Milk Powder Exports

Source: USDA, FAS, GATS. HS code: 0402,
Milk Concentrated. (Iowa State – Choices)

Article from Choices discussing global dairy subsidies: http://www.choicesmagazine.org/choices-magazine/theme-articles/3rd-quarter-2014/some-trade-implications-of-the-2014-agricultural-act

3. From the FT, an article about milk exports, including 2 great graphs:

http://www.ft.com/intl/cms/s/0/8f024956-54cb-11e4-bac2-00144feab7de.html

Iowa’s Role in Feeding China. Feature from the DesMoines Register.

The DesMoines Register will begin its feature story on Sunday about Iowa’s role in feeding China now and in the future. They have a nice 2.5 minute video promoting the story that I enjoyed watching. I hope you do, too.

Link to map and statistics. Page includes links to each day of series.

Link to promotional video.

Link to Sunday article including video.

Link to “key players”.

South-North Water Scarcity Engineering Projects in China


Photo by Pimm @FlickrCC – August 2010 – Beijing

China’s South-North Water Diversion Projects
One of the regions of the world which has a worrisome level of water scarcity is northern China, including its capital city of Beijing, a city with a population of over 21 million people.

The World Bank’s definition of a water scarce region is 35,300 cubic feet of fresh water per person, per year. Each Beijing resident has about 15 percent of that amount and eleven of China’s thirty-one provinces are dryer than this.

Northern China has only a fifth of the country’s fresh water but two-thirds of its farmland. Seventy percent of northern China’s water is used for agriculture to produce crops such as corn and wheat. Groundwater levels are plummeting because of un-tariffed extraction by farmers and urbanites and groundwater is also becoming contaminated. Thousands of rivers have disappeared in the region due to overuse for grain production, and for highly inefficient use in industry. Much of the river water that is left is too polluted even for industrial use. A 2009 report revealed that half of the water in seven main Chinese rivers was unfit for human consumption.

Northern China is arid and southern China is water-rich, so the Chinese government’s “fix” attempt has been throwing tens of billions of dollars towards water engineering projects to get water moved from south to north across the country.

The first of three phases, the Eastern Route, was completed last year. In that project, China’s 1,400 year old Grand Canal was expanded with concrete to move water from the Yangzi river basin towards the port city of Tianjin.

Phase Two Will Be Complete October 31, 2014
By the end of this month, phase two, the Middle Route Project, is to be completed. This large, expensive, decade-long project will move water from the Danjiangkou Dam in the central province of Hubei to Beijing. Somewhere between 300,000-500,000 Chinese people were displaced for the project. This project will supply about a third of Beijing’s water needs, and even more to Tianjin.


Map credit: Brookings.edu

A third future project is even more controversial and challenging than the first two. A high altitude diversion from the headwaters of the Yangzi to the upper Yellow River would be moved across the Tibetan plateau. Some doubt that this could be done and worry about all of the unfortunate consequences from the project, such as ruining many hydropower plants.

Conclusion: Poor Policy and Questionable Food Security
Outsiders have been critical of China’s water policies for years, seeing all of these efforts as mere temporary fixes. They recommend that water needs to be priced appropriately to motivate conservation and wiser use. Some advocate that China should import grain rather than be obsessed with a national food security policy. Perhaps, in the future, they won’t have a choice in the matter.


Further reading:

1. http://www.economist.com/news/china/21620226-worlds-biggest-water-diversion-project-will-do-little-alleviate-water-scarcity-canal-too

2. http://www.brookings.edu/research/papers/2013/02/water-politics-china-moore

3. http://e360.yale.edu/feature/on_chinese_water_project_a_struggle_over_sound_science/2103/

China is a Major Importer of Distillers Grains DDGS

This graph will show you what rising incomes and more meat consumption in China mean for the U.S. agricultural export market.

China’s demand for imported grains, much of it from the United States, has surged recently, with imports of cereal grains rising to 16 million tons in 2012 and 18 million in 2013. Imports in 2013 included 3 million tons of corn and 4 million tons of DDGS (distillers dried grains with solubles; a co-product of U.S. corn ethanol production used for feed) from the United States.

In 2013, the United States supplied 70 percent of China’s wheat imports and, for the first time, China became a major market for U.S. sorghum. China’s demand for feed grains appears to have reached a turning point, as a tightening labor supply and rising feed costs force structural change in China’s livestock sector.

Labor scarcity, animal disease pressures, and rising living standards are prompting rural households to abandon “backyard” livestock production and shift more production to specialized farm enterprises that rely more heavily on commercial feed. Because of this, China has switched from being a corn exporter to importing 3-5 million tons annually since 2009.

Rising feed demand has also pushed up costs and motivated feed mills and livestock producers to explore new feed ingredients like DDGS and sorghum.

source: usda

The Old Way of Agriculture in China

The FlickrCC photographer, James Wheeler, said this about his photograph:

Took this photo in southern Yunnan, China, in a small town just before the Burma border crossing. The electricity was unreliable and the town was missing many of the “comforts” of development, like indoor plumbing and refrigeration. They lived a simple life raising their crops and tending to livestock, much as they have for hundreds of years. (May 2007)