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Northey: Changes ahead for Chinese feed production industry

DES MOINES, Iowa – In the last nine years, Iowa Agriculture Secretary Bill Northey has been to China six times.

He returned this week from his most recent trip, as part of an Iowa Soybean Association delegation. He says each time he’s been in the past, he’s heard about increasing feed production in China, by as much as ten to 20 percent some years. That’s been good news for imported grains and oilseeds.

“This time we heard that, in some cases, that’s leveling off,” reports Northey. “It’s not really dropping back, but it’s leveling off. So the premise, by many of the folks there that are in the feed business and should have a great handle on it, is that we won’t see those double-digit increases.”

Northey says the Iowa delegation was given several reasons for the growth plateau: “One is that we used to have a lot of pigs that were fed scraps and other products, rather than corn and soybean meal. Most of that conversion has happened, and so now all those pigs that were there that weren’t being fed corn and soybean meal pretty much are.”

In addition, China’s economic growth is slowing somewhat, meaning Chinese consumers aren’t flocking to urban areas with a taste for meat products quite like they have in the past. Northey says China’s population is also aging, and demand for meat is tapering as the average Chinese citizen gets older.

“It’s still a big market,” he adds. “It’s still [the case that] two percent growth or five percent growth on a 70-million ton market is a big deal, certainly for soybeans especially. But it’s probably more of a mature market and less of a growth market like it has been over the last fifteen years. So we’ll see how that plays out. They had good reasons to believe that some things are changing in China.”

To hear more about Secretary Northey’s trip to China with members of the Iowa Soybean Association, click the audio player above this story.

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