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August 19, 2008

Changing what we eat

The world - and especially the developing world - is changing. One of ways we see this change is in changing buying habits of food by consumers in countries like China, India and Southeast Asia. Just what's happening and how can it possible affect you and me? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Well, what economists have noticed is that what people eat does vary with their income. As consumers move up the income ladder, they tend to eat more protein like meat. Now meat costs more and so, obviously, you need higher income to afford it. But large increases in meat consumption can have a wider impact on the entire food chain, and here's the reason. It takes 7 pounds of grain to produce 1 pound of meat, meaning that the animal has to eat 7 pounds of grain in order to be valuable for 1 pound of meat and protein. So when meat consumption rises - and particularly in developing countries like China, India and Southeast Asia, where they are switching from directly eating grain to meat - actually our worldwide use of grains like wheat and corn is going to skyrocket. And this has been happening in the world. If you look at charts, you see that the world consumption of grains has gone up tremendously, even while, as I said, consumers are shifting more away from directly eating grains to meat. So what does this mean for you and me in the supermarket? Well, it means that grain prices are up, and grain is a feed into not only meat, but it's a feed into obviously chickens, who produce eggs. It directly effects things like the price of bread. So that is one reason why we have seen big jumps in the prices in those products. It's because this big jump in the worldwide use of grains is behind it."

Posted by Dave at August 19, 2008 08:00 AM