Changes in Global Population Trends Demand Attention Now to Avoid Future Shock

By the time planters roll in Iowa this spring, India will have surpassed China as the world's most populous country.  The United Nations estimates that in three months, India's population will swell to 1.45 billion, ranking first globally.  Of India's 1.41 billion people, 1 in 4 are under the age of 15 and nearly half are under 25. Since 1950, India and China have accounted for 35% of the world's population growth.  Conversely, just one-fourth of China's 1.45 billion people are 25 years or younger.

China's population is set to peak in the coming years and projected to decline. This means that the older, nonworking population will have to rely on individual single children, many of whom will probably face economic difficulties caring for two parents and four grandparents. As a result, many elderly Chinese will be left to rely on a public pension system that is reportedly set to be depleted by 2035, despite recent efforts by the government to boost revenue.

Population growth in China is flatlining, and its supply of cheap labor may follow suit. India and its growing population of more than a billion people could pick up some of the slack, but its growth rate is also declining, according to UN reports. In addition, its industrial infrastructure is not as robust as China's. And much of India's population growth is centered in its poorer regions, especially in the north.

By 2050, data shows that India is expected to provide more than a sixth of the world's population of working age (15 to 64 years old).

According to the U.S. Soybean Export Council, India is the world's largest producer of milk, #2 largest producer of aquaculture, #3 largest producer of eggs and #6 largest producer of broiler meat, as well as home to the highest cattle population on the planet. India is also the world's largest importer of vegetable oils and currently the largest importer of U.S. Soy oil. U.S. Soy has collaborated with India since 1996.

Contrast India with China. China is currently the biggest food importer on the planet, but they are entering the real-time throes of a potentially devastating population crash and the effect could be immense. China has broken every branch on its family tree without need of war, cataclysm, or disease via 40 years of adherence to a self-imposed one-child policy. According to multiple estimates, China’s populace may dwindle from the current 1.3-1.4 billion to 1 billion by 2050 and a near unthinkable 494 million by 2100.  If China’s population is halved or diminished by a significant portion, the repercussions on U.S. agriculture exports could be massive. “This is going to happen - and happen faster than most people think; it’s happening right now,” says Todd Thurman, international swine management consultant and owner of SwineTex Consulting Services. “China’s population decline is not theoretical or even controversial- it’s only a question about the time frame and the degree of loss.”

American ag is asleep at the wheel, Thurman contends. “China - our biggest ag commodity buyer at present and the biggest in history - is on track for a population collapse like nothing the planet has ever seen, but hardly anyone in U.S. agriculture is taking notice.”  Every day, China must feed 20% of global population. China is not only the world’s biggest consumer of agriculture goods - it is the biggest in history.

In tandem with population loss, China quickly is going gray. By 2030, 360 million Chinese - a quarter of the country and more people than the entire citizenry of the U.S. - will be older than 60.  Even if China experienced a massive baby boom (unlikely as all relevant trends point the other direction), the population will still decline in the near to medium term. The population die is cast.  Plainly stated, China can’t unring the demographic bell. The UN’s World Population Prospects 2022 (WPP) report predicts India will overtake China in 2023 as the most populous nation. Further, the WPP report contains dismal population prospects for China by 2100. Best outlook, China drops by 20%. Base outlook, China drops by less than 50% - 771 million. And worst outlook? China declines by over 60% to 494 million.

Despite possible upheaval for the world’s No. 1 importer of food, U.S. agriculture is not paying attention, according to Thurman. He points to a trio of baselines for American farming to consider: “There are three factors that are not contentious or disputed. One, China’s population is going to be smaller in 2100 than it is now. Two, China’s population has either peaked, is peaking, or will soon peak. Three, China’s population is aging at the fastest rate in human history, and they can’t stop the slide.”

The entire structure of modern agriculture, head to toe, is built on a tacit assumption: Tomorrow’s population will be bigger than today’s population. The assumption has held true - until now. The family tree is shrinking in almost every corner of the globe, with Africa as the exception.

Africa is projected to have robust population growth over the next 30 to 70 years, according to Pew Research Center. Up from its present 1.5 billion, Africa’s population is expected to reach 4-plus billion by 2100, including five of the 10 most populous nations: Nigeria, D.R. Congo, Ethiopia, Tanzania, Egypt.

“At a minimum, the contrasting directions of China, India and Africa tell us there’s a significant shift coming in global ag and food markets,” says Thurman. “We’re going to see a major market move, but if we’re flippant, someone will beat us to the punch. You can’t turn your export boats to other countries on a dime. The global population is expected to peak around mid-century so exporters will have to find demand in a declining global market. The competition will be intense.”

Benchmarks on the horizon often are ignored simply because of distance, but such a perspective is costly for agriculture, Thurman insists. “It’s concerning to me that we are decades away from a population trend impact and we not only have no plan - we aren’t even having a conversation.”  Thurman does not pull his punches. The China stakes, he insists, are mammoth. “There is no precedent. There is no historical reference point for the slow fade of an incredibly large number of people. The U.S. agriculture export industry should consider the ramifications now because change is already baked in the pie and the sooner we recognize it, the sooner we can develop strategies for the new reality and the less painful those adjustments will be.”

EDITOR’S TAKE:

Very enlightening data and discussion. As Mr. Thurman correctly points out, it is one thing to recognize change, but quite another to act upon that information before it becomes a crisis. This article provides us with not only the downside of China’s population decline, but also provides clear hints at where to focus our market strategy going forward. India and Africa hold the promise of new market potential. Although India is more self-sufficient than China, as their population continues to grow, they will need to increase imports from countries like the U.S. Africa has a deeper-rooted issue that will need to be addressed – improving income levels for their populace. Increased income will drive the demand for increased food imports, especially meat and protein. Bottom line, American farmers/ranchers should heed these market changes and start planning longer term strategies to capture new markets before our competitors like Brazil and Argentina beat us to the punch. It is imperative that U.S. agricultural exports continue to grow and expand, thus, allowing our farmers and ranchers to garner the income necessary to continue purchasing your trucks!