Have a look at the graph below, taken from www.earth-policy.org, which conveys the stylised fact that greater economic development leads populations to eat more meat. The graph shows that total meat consumption in China increased from 10 million tonnes in 1980 to around 70 now, a 7-fold increase, and making the meat economy of China twice that of the US. With a 50-fold increase in GDP in that same time, we are looking at an elasticity of around 0.15 with the size of the economy: if the economy doubles, meat consumption goes up 15%. The elasticity with economic growth is around .5 in that 10% economic growth means around 5% meat growth. In economic terms, meat is a luxury good.

Interestingly, a similar increase and elasticity also seems to have held for the US in this period, with the growth only stalling when the economy stalled. If we fast-forward China’s GDP growth for another 15 years, we should get another doubling of meat consumption.

 

meat in the US and China

meat in the US and China

The wider significance of this relation is that in many ways, this is bad news for the world but good news for Australia. Meat takes more inputs to produce than equivalent amounts of vegetable calories and thus basically means more of the world’s natural resources get to be converted towards human consumption, with all the issues of loss of biodiversity that come with that. It’s good new for Australia in that we probably have a comparative advantage in meat. Something to keep exports going when the price of iron and coal drop!

I also find this a sobering graph in terms of the substitution of meat with vegetable-based equivalents. They don’t seem to make any dent on trends yet.

2 Responses to Random thoughts: meat consumption set to keep growing.

  1. G’day Paul,

    On that story of good news for Australia’s ag industries, here’s a chart published by the RBA a couple of years ago showing steep uptrends in the consumption of meat and sugar – and a flattish intake of grains – as populations become wealthier.

    Hello China and India in particular. I won’t go into a long discussion of what it means for the future health of those billion-plus populations. Just one word:”diabesity”. http://www.australianparadox.com/part-2

    By the way, Paul, I loved your piece on “Universities as Royal Courts”. Absolutely top-shelf as a fun-to-read piece. In particular, I found it fascinating in terms of the dynamics involved when an outsider punches a hole in a university’s credibility.

    • thanks Rory. Yes, with the modern lifestyle you get to see modern problems in China. India is interesting because it already has such high recorded depression rates whilst still being very poor.

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