Over the last half century most countries have managed to provide a better standard of living for their citizens, at least doubling adjusted GDP per capita and some seeing incomes multiply by 23 times their 1960 level (in Singapore’s case) or 35 times (Botswana and South Korea). A handful saw negative growth, sadly all in Africa. Data for mainland China is not available, but it’s plain to see how much the country has changed since 1980.
With this new affluence comes the desire to live, eat, and dress better. The internet, improved logistics and global trade mean that goods and services are available more widely, including in remote areas. In theory there ought to be a natural limit as to how much we purchase and consume; the reality is that too many of us are greedy and don’t know when to stop. Hence too many are maxing out on their credit card, hitting ‘peak stuff’, and becoming overweight.
These trends are reflected in wholesale markets, though not necessarily in retail prices as supermarket wars and the death spiral of the department store continue apace. Pork, long considered a delicacy by the Chinese, has seen prices more than double over the past eight months, from 40¢ per pound to a high at 92¢ last week. They seem to be stabilising a little, while establishing a new higher trading band, likely to hold between 60¢ and 100¢ until year-end.
More dramatic price swings have been seen in the futures market for live cattle in Chicago. They set a new record high at 192¢ per pound in 2014, only to then slump to 94¢ in October last year. Like pork it appears to be establishing a new higher trading band, roughly between 110¢ and 150¢ per pound. Demand from the Middle East has more than made up for reduced consumption in Europe.
The biggest increase in consumption has been that of chicken, an animal protein that is cheaper to produce and where most religions allow it to be eaten. The US Department of Agriculture reports that retail prices are up by about 50 per cent since 2007, holding steady at about 150¢ per pound for the past four years. Again chart analysis suggests that we have reached a sustainable level and that the next move is more likely to be another step higher rather than a slump.
In Britain Seafish UK reported that operating income rose 22 per cent last year as prices for fresh and frozen seafood grew at their fastest pace since the financial crisis. Gross value added rose by 25 per cent year on year to £467m.
Last but not least we look at soybeans because they are the basic unit of animal feed. Like the previous charts it’s seen some really wild price swings since 2007, ballooning from 50¢ per bushel on the Chicago Mercantile Exchange to a record high at 179¢ in 2012. Currently forming a base against the 90 cent level, we feel that another price surge could be on the cards; those involved in animal husbandry should consider hedging against this eventuality.
In the meantime, with an eye on our waistlines and wallets, perhaps we should all moderate our animal protein intake and adopt a semi-vegetarian diet.
