Photo: ChinaFotoPress//Getty Images
Much of the world’s recent increased agricultural production and fertiliser demand has come from China, which is now the world’s largest producer.But both may be hitting a wall, according to a report from Jefferies called “A Time To Plant, A Time To Reap.”
A few forces are driving the slowdown. First, China is nine years ahead of schedule on production of staples. Second, China is running out of arable land. Third, natural gas price reforms threaten gas-based fertilizers. Fourth, China has finished converting land to fertiliser-heavy crops like corn.
We’ve picked out some fascinating charts from the report by Jack Lu.
Arable land accounts for about 11% of China's total landmass compared to 17% in the U.S. Over the last few years, however, the amount of land suitable for growing crops in China has shrunk due to increasing industrialisation and environmental degradation.
In order to increase productivity without increases in planted area, China ramped up its usage of fertilizers. China uses nearly three times the fertiliser per hectare compared to the U.S., resulting in about twice the production per hectare for rice and wheat.
China's fertiliser consumption grew 741% between 1975 and 2010, driving a 124% increase in grain production.
Between 2000 and 2010, China's per hectare fertiliser consumption increased by about 40%, driven largely by increased production of fruits and vegetables.
In 2007, vegetables and fruits accounted for about 35% of China's fertiliser usage, more than double the share of fertiliser usage in 2000.
China's farmers nearly doubled fruit and vegetable production over the past decade. Now China's fruit and vegetable consumption is nearly at U.S. levels.
Although China's 2011 staple production already hit 2020 targets, China's policy in the 12th 5 Year Plan is to limit the expansion of planted area for other crops to ensure grain security.
Business Insider Emails & Alerts
Site highlights each day to your inbox.