December 9, 2007
The growing appetite of young Chinese workers for all things western, including dairy products, is having a profound effect on global agriculture.
Many years ago, in the mid 1980s, when I worked as a barman in a Chinese restaurant in Toronto (yes, you read right!), one of the Chinese waiters explained to me that he thought we – that is all westerners – smelt of dairy products. He claimed he could smell butter, cheese and milk from our skin.
Probing a bit deeper, I asked whether this was a pleasant experience for him, to which he recoiled and exclaimed that our odour repulsed him. This prompted a bout of arm-sniffing self-consciousness, as he went on to claim that Chinese people didn’t eat dairy, believing it to be an almost barbaric staple.
This was not one man’s idiosyncrasy. It was true. Others confirmed the theory to me that, indeed, Chinese people detested dairy as much as we love the stuff. So it was a great surprise to me to notice on a recent visit the epidemic of Starbucks in Shanghai.
The first thing to strike you about Shanghai is the foreignness of it all; the buildings, the teeming masses, the ambition and the sense that you are in a true 21st century megapolis. However, on the street the small details are as revealing and one of those small features is Starbucks.
Here, in the shining city of the country that supposedly hates dairy, a milky crÃ¨me brulee or full-fat frappuccino epidemic has taken hold. There is a Starbucks on almost every street corner and it is full of Chinese students and workers sipping iced vanilla lattes.
Have the Chinese changed their eating habits? It seems that they have. The offices of Glanbia in Shanghai are a testament to this. Glanbia is in, among other things, the milk-formula business, which is booming in China. Chinese maternity wards are making a wholesale shift to milk-formula feeding and this is having a profound effect on the worldwide price of dairy. In a year when stock market and house prices have been falling, the price of agricultural produce has gone through the roof. This has a lot to do with the changing tastes and demands of China.
Another thing you notice in Shanghai is the number of traditional American steakhouses. Beef consumption in China is also skyrocketing. By switching from fowl to beef, the Chinese have had a huge impact on the price of global agriculture and may now be kicking off a 20-year trend, during which we will all experience consistent food price inflation. Before we think about where this might be taking us, let’s proffer a few ideas as to why it is happening.
The east is going west as quickly as the west is going east. The middle classes in the west have become obsessed with the east and the middle classes in the east have become obsessed with the west.
Look around the suburbs of Ireland and see how the middle class infatuation with all things eastern has become almost obsessional. Think about yoga, lentils, sushi, lemon grass, chilli, coriander, pak choi, chopsticks, rice wine vinegar, sake, soy sauce, sesame seed oil, nam pla fish sauce, garam masala, cumin, Buddhism, meditation and ashrams.
What we are seeing is definitional consumption. So, when choosing what to eat, many people are not so much satisfying the biological taste bud urge of ‘‘I like that’’, but rather the more socially subtle signal ‘‘I am like that’’.
So the well-heeled, worldly westerner is not only deciding to love the taste of sushi, lemon grass and coriander, they are also sending out a clear signal as to how they would like to be regarded.
They want to be lemoney-grassey, sushi-eating, coriandery type of people, as opposed to meat and two veg types. This sets them apart on the social hierarchy. In the new moral code of the western middle classes, less is more.
Only the poor are fat and only the rich have green-budgets based as they are on self-restraint, making do and going without. Sacrifice is the new excess and what better image of sacrifice than the self-styled Donnybrook version of Ghandi, abstaining, dieting and refraining. Oh such self-control in an era of bling!
In China, the new middle classes have no truck with such self effacing carry-on. They love spending, brands and flashing their cash. They have rejected Confucianism for consumerism. Shanghai is brand central, where the fashionable are kitted out head to toe in Versace, drink Krystal and generally out-spend the west.
Many of them want to eat, drink and look like us, while many of us, want to eat, drink and act like them. Their middle classes are actively rejecting their traditions in favour of ours and our middle classes are rejecting our traditions in favour of theirs.
The impact this will have on economics could be profound. Already we see China’s impact on oil prices, as it drives its industries to make the goods necessary to get the cash to spend in Starbucks. We are also seeing the great untold story of agricultural inflation, where Chinese demand is among the key factors driving up the price of a pint of milk in Ballincollig.
Both of these trends are completely at odds with the past 20 years, when cheap oil in the late 1980s to the early part of the century and cheap food from the 1970s to now have been the dominant background noise to our economic expansion.
This is now changing and a era of food inflation is on the way. This will have an impact on the price of agricultural land around the world, as the yield from land rises on the back of food price inflation.
Additionally, as the west reacts (rightly) to the green agenda we could see what the UN refers to as a ‘‘massive switch to agro-fuels’’.
Last year more than one-third of the total US maize crop went to ethanol for fuel – a 48 per cent increase over 2005.This trend is on the increase all around the globe and will take more land out of agricultural production, putting further upward price pressure on food prices and by extension agricultural land prices.
We may well be on the cusp of the great new era for global farming. And the trigger to this revolution can be traced to skinny-tall lattes on the Bund in Shanghai and wheatgrass juice in the ashrams of Rathmines.