Marcos Fava Neves
The Future of Food Business

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The Incredible Role of the USA in Food Trade

Popularity 5Viewed 2904 times 2015-8-27 19:47 |System category:News| Food, Agriculture, Trade


Marcos Fava Neves

 

In a sequence to the last article that raised nine big issues in food and agribusiness, bringing discussions held at the recent World Food and Agribusiness Congress (an annual event by the International Food and Agribusiness Management Organization), this story deepens the analysis about the first two issues, the growth of global food trade and the increasing role of the USA in this context.

 

It is agreed that food markets will continue to grow, pushed by rising Asian and African countries, that have increasing and wealthier populations, are urbanizing in an incredible rate and due to more sensitive Governments in the issue of providing basic income, food access and food distribution. Agribusiness faces a future full of opportunities in a world with around 9,2 billion consumers in 2015 and 11,2 billion in 2100.

 

The USA has one of the most dynamic roles in this market, since agricultural production doubled in the last 60 years, growing around 1,5%/year, strongly based in productivity growth. A report from the USDA shows that from 2010 to 2050, the expectations are to continue growing by 0,86/year, a smaller rate, but very relevant when looking at the additional amount that will be produced.

 

Agri-food exports grew from US$ 50 billion to around US$ 150 billion from 2000 to 2014, or simply one can say that in 2014 the USA exported US$ 100 billion more than fourteen years before, mostly to emerging economies and facing new competitors. This growth will continue, although the valuation of the US$ puts some extra pressure on margins.

 

But if production and export numbers are impressive in the USA, when looking at food consumption and imports, the surprise is bigger. Even with the consumer’s average income spent on food decreasing from 18% in 1960 to 10% in 2014, the growth of the USA population and amount of disposable income for each American consumer made food expenditures go from US$ 300 billion in 1980 to almost US$ 1,5 trillion in 2014. Out of home consumption represents 50% of food expenditures and is increasing, booming the foodservice business by 5% or approximately US$ 30 billion more per year. In the last years, foodservice business had a growth of more than US$ 80 million per day, representing lots of opportunities.

 

This consumption growth opens opportunities to sell products to the USA. Food imports went from US$ 40 billion to around US$ 115 billion from 2000 to 2015. This means that the USA increased its food imports by almost US$ 5,3 billion per year, US$ 15 million per day or more than US$ 10.000 per minute… 


With a stronger US$, for food and agricultural exporting countries, not paying attention and not trying to participate in the USA food market is a huge mistake.

 

The author is professor of strategic planning and food chains at the School of Economics and Business, University of Sao Paulo, Brazil (www.favaneves.org) and international speaker. Author of “The Future of Food Business” and other 50 books published in 8 countries and in China, “The World on the Tongue”.

 

(Opinions of the writer in this blog don't represent those of China Daily.)


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MarcosF.Neves

Professor of strategic planning and food chains at the School of Economics and Business, University of Sao Paulo, Brazil (www.favaneves.org) and international speaker. Author of 25 books published in 8 countries and in China, “The World on the Tongue”.

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