The U.S. Midwest versus China in Agricultural Competitiveness
China's accession to the World Trade Organization in 2001 was a significant event for U.S. agricultural trade. China has promised to cut tariffs and further open its markets to U.S. products. The exact composition and extent of U.S. agricultural and food trade with China, however, remains unclear. Recent research at the Midwest Agribusiness Trade Research and Information Center (MATRIC) compares the productivity and cost of production of China and the U.S. Midwest to see how the two agricultural powers might stack up. The results show that the U.S. Midwest has a substantial advantage in land and labor productivities in producing corn and soybeans. Only China's Northeast region has an advantage over the U.S. in cost of production. In hog production, the U.S. Midwest has a cost advantage over China in feed cost and labor productivity, but this advantage is more than offset by the lower cost of feeder pigs and possible lower capital replacement cost in China. Land policy and labor productivity will be important determinants of the competitive positions of the two countries in the future. For more information, see "Does the U.S. Midwest Have a Cost Advantage Over China in Producing Corn, Soybeans, and Hogs?." Contact Jacinto Fabiosa, (515) 294-6183, or Sandy Clarke, Center for Agricultural and Rural Development, (515) 204-6257.
(Released September 2002)