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Sophisticated Asian markets ahead

DANIEL LOOKER 02/22/2012 @ 2:54pm Business Editor

Today, China is a key market for bulk commodities from the U.S. and South America. But in the future the U.S. could lose out if we don’t anticipate demand from affluent Asian consumers for specialized foods that fit their healthy lifestyles. It means more exports from the U.S. will be identity preserved, backed by quality tracking.

That’s a key conclusion from a report, Food 2040, that the U.S. Grains Council will release Friday at the USDA Outlook Forum in Washington, DC.

This week, the Council’s President and CEO, Thomas Dorr, shared background on the report with Agriculture.com.

“The bottom line is the world is getting richer and the world is demanding higher quality protein food,” Dorr said.

The report lays out the possibilities for foods sold in Asia in 2040, using Japan as a bellwether for other affluent Asian countries’ buying and eating patterns.

By 2040, 70% of food consumed in Japan will be prepared outside the home. Many consumers in Japan won't even have kitchens, perhaps just a corner sink, microwave and small refrigerator.

That could be part of a food system that has less waste, Dorr said.

“If you can buy precisely what you need without any waste, you can capitalize that efficiency into a higher value product,” Dorr says.

Just as they quickly adopted cell phones without putting in more expensive land line systems found in the U.S., developing nations may establish food systems that leapfrog into high-tech distribution of products aimed at sophisticated consumers.

“What we’re going to have to do long term, and maybe short term, is figure out how we can compete in those markets,” Dorr said.

China may seem far behind Japan, but Dorr doesn’t expect that to last long.

“They don’t have systems in place to manage food safety but they are developing them,” he said.

And, because of the size of its market, China will likely be setting food standards for exporters, the study concludes.

But it’s not the only Asian nation with a growing middle class. Malaysia is another. And India.

“If you look at Bangladesh, they’re doing very, very well,” Dorr said.

The study isn’t a forecast, Dorr said.

“Food 2040 is not designed to be a prediction. It lays out the possibilities,” he said.
There is no way we can know what type of food system will be in place in Asia in 2040 and Dorr compares it to the rapid development digital technology. That can be a sobering analogy, if you look at companies and industries that didn’t adapt. Look at digital photography and Kodak. Or Internet information and services and newspaper publishing.

“This implies we may be at the same place in food technology that we were at in computing technology in 1980,” Dorr said.

That doesn’t mean Dorr is pessimistic about the future of U.S. ag exports. He sees them as an opportunity.

“We have the technology, economic wherewithal and creativity to develop value-added products,” he said.

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