As we navigate this current economical climate, there are things we need to consider. The global marketplace is not the same as it has been in years prior. Countries and populations are changing. We are seeing negative population growth in countries like China and Japan. We are also seeing the emergence of a middle class around the globe. That is going to change the dynamic of how we approach trade, especially when it comes to food.
It’s the old debate of quantity versus quality. We are finding countries that are having fewer mouths to feed, but those mouths are going after better-quality items. Selling better quality items can outweigh selling a large amount of cheaper items.
Dr. Matt Roberts is Senior Grain and Oilseed Sector Analyst with Terrain. He talks about the dynamic shift we are seeing in this marketplace.
To put it in context, the average GDP income of people in China is $17,000. Compare that to the $38,000 we see in the state of West Virginia. That means we are still seeing a large gap in consumer spending, but that gap is shrinking.
Where Dr. Roberts is concerned is the momentum shifting back to protectionist trade, rather than free trade.
Dr. Roberts says we can see this example around the globe in things like the USMCA agreement or in Brexit.
These are trends at the moment. A long-term projection is harder to divine. As most of us know, that if we had that kind of power of foresight, we would be in different tax brackets.
