China owns U.S. debt, and U.S. food supply?

November 15, 2010

Diane Sawyer's evening news reports this week center on China - the culture and the business.

Diane Sawyer's evening news reports this week center on China - the culture and the business. What most consumers are about to discover is that China is now the third largest source of combined U.S. agricultural and seafood imports, according to the U.S. Department of Agriculture. U.S. imports of Chinese agricultural and seafood products increased roughly fourfold, from 433,000 metric tons (MT) and $1 billion in 1997 to 2.1 million MT and $4.9 billion in 2007 (the latest year USDA reports). 

According to the USDA’s Economic Research Service, China has emerged as a major exporter of a wide range of food products, mainly processed foods. China’s capital investment in processing facilities helped to achieve its export status, as illustrated by the remarkable growth in China’s apple juice concentrate exports since the 1990s. In 1998, Chinese fruit juice exports to the United States were valued below $30,000. However, the value of these imports soared above $356.8 million in 2009, making China the largest exporter of fruit juices (mainly apple) to the United States, a position long held by Brazil. Two-thirds of the U.S. apple juice supply now comes from China.

Fruit is not the only food import that has shifted over the past decade. Since 1999, China’s export of sauces, soups and prepared foods - which includes soy sauce, tomato ketchup, broths, mustard ice cream, edible ice, protein concentrates, and vinegar - increased from $32.1 million to over $107 million dollars.

Globalization has had a major impact on sources of consumer-ready food products from traditional suppliers, such as Canada, to developing countries, where manufacturing costs are lower. The USDA reports that severe competition from China and Indonesia resulted in the decline of Canada’s 60 percent share of the U.S. smoked and dried fish import market in 1998 to 20 percent in 2007. Similarly, Canada’s lead in U.S. market shares for frozen fish, processed meats, and fluid and powder milk eroded as market shares rose for China (fish, milk), Brazil (meat), and Mexico (milk). 

Eight countries – India, Indonesia, China, Brazil, Peru, Madagascar, Mexico, and Vietnam – accounted for three-fourths of spices imported into the United States in 2007, with India alone accounting for 24 percent. China and Brazil were the largest exporters of ginger to the United States. From 1999 to 2009, China’s spice trade with the U.S. increased from $20.8 million to $80.1 million.

When it comes to frozen and preserved seafood, Asia has a tight grip on the U.S. market. The bulk (over 75 percent) of fish products entered the United States frozen. About 84 percent of the frozen fish imported in 2007 were filets rather than whole fish. Two-thirds of imported filets came from Asia in 2007, mostly from China. In 1978, China accounted for 14 percent of filets, Canada for 13 percent, and Iceland for 12 percent. By 2007, China accounted for 49 percent and Canada and Iceland each accounted for 4 percent. Slightly over a third of frozen whole fish came from Asia – again China being the largest provider, accounting for 25 percent of imports. As of September 2010, 80% of tilapia (whole and filets) imported by the U.S. this year came from mainland China and Taiwan; while 4 percent of Atlantic Salmon imports were from China; and 8 percent of U.S. shrimp imports were from China.

Although imports from China were valued at only about 2 percent of the total value of 2007 fresh vegetable imports, they grew from $2 million in 1998 to almost $75.4 million in 2009. China was the second largest source of U.S. preserved vegetable imports in 2007, with a total import share valued at 20 percent. This dramatic growth in U.S. imports from China dipped only slightly, China ranked number one in dollar share of $105.6 million in 2009.

We even get some chocolate from China. Referred to as the “new chocolate exporters” – China, Chile and Russia have started to gain a share of the U.S. market, although Canada and Mexico accounted for almost two-thirds of all cocoa product imports to the United States as of 2007. U.S. imports of sugar candies doubled in value between 1998 and 2007, reaching $1.2 billion in 2007, and accounted for half of the value of all U.S. sugar and sugar product imports. Canada, Mexico, and China accounted for over 70 percent of all U.S. candy imports.

Look for more consumer interest on the supermarkets shelves as these abc news reports are sure to intensive Country of Origin Labels.