Building U.S. agricultural exports: one BRIC at a time

Jason Henderson

Economic Review, 2011, vol. 96, issue Q I

Abstract: After declining during the recession, U.S. protein exports are expected to rebound as the global economy recovers. Much of the rebound will depend on BRIC countries Brazil, Russia, India, and China. In recent decades, rising incomes and large populations in these countries have created a growing middle class, resulting in one of the most dynamic agricultural trade markets on the globe. As incomes rise, people enrich their diets by eating more proteins. U.S. agricultural producers have seized these emerging market opportunities by boosting trade with these countries. ; Forecasts suggest the rising demand for protein in BRIC countries will propel U.S. meat exports in the future. Yet, a closer inspection of historical trade patterns with BRIC countries suggests that U.S. protein exporters may struggle to expand their share of these markets, for two reasons. First, BRIC countries are moving through differing stages of development, which may tilt the balance of food imports and domestic production. And second, Brazil has emerged as a juggernaut in agricultural trade with other BRIC countries, dulling the competitive edge of U.S. producers. ; Henderson explores the future of BRIC agricultural export markets. He concludes that, as BRIC countries increasingly try to satisfy their growing demand for proteins with domestic livestock production, the sharpest gains in U.S. exports may not emerge from protein but from feed crops. Yet, even these bright opportunities may be dulled as BRIC countries bolster their own grain production.

Date: 2011
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