Ross Koda, president of Koda Farms, operates the California products booth at the 2016 SIAL Shanghai food expo. Koda, who began exporting rice to China this year, runs the oldest family-owned rice farm in California, producing a medium-grain Japanese-style heirloom rice, a whole grain brown rice and a Sho-Chiku_Bai sweet sticky rice. Photo: Courtesy of California Center

In more ways than we realize, the foods we eat evolve just as fast as the fashions we wear. Certainly, the rice served in China today is far different from the grain that sustained Chairman Mao’s forces on his Long March. The “miracle rice” of 1970 that eliminated hunger in Taiwan has been supplanted many times by even more productive varieties. Hybrids used to be developed for resistance to disease or to increase crop yield, but often today they are bred for taste, appearance or sheer novelty – as well as bigger profits.

New food items appear first at major food trade shows. Hofex, a massive exposition that fills Hong Kong’s Convention and Exhibition Center, plus the FHC and SIAL food shows in Shanghai are the main showcases for traders trying to enter the Mainland China market. But the China Food and Drink Fair in Chengdu is becoming more important with every passing year. California has a major presence at all four shows.

‘Safe clean and reliable goods’

More than a third of California’s annual $20.69-billion agricultural exports go to Asia.  “This year we even exporting rice to China,” says Gordon Hinkle, vice-president of California Center, a trade promotion organization that connects California growers with Chinese buyers and wholesalers. “The China market is growing because consumers there demand the safe, clean and reliable products that California produces.”

New fruits and vegetables are often grown to satisfy a specific market niche or fill a commercial need. Pink Lady apples that resist turning brown after being cut were developed for Asian salad bars. Because some Chinese like to peel grapes, California growers developed “slip skin” table grapes, which easily lose their skin when the grape is pinched. Developed in Japan and perfected in Salinas, CA, broccolini is a slender-stemmed form of broccoli that sautés quickly, can be eaten raw and retains full flavor when steamed. 

The newest trend in food marketing, however, revolves around designer fruits and vegetables, which may not be better nutritionally, but are always visually appealing.

Take flowering kale. This favorite basically is standard kale that has been genetically enhanced to sprout small buds of color. It tastes exactly the same as the original, but looks far more appetizing when stir-fried.

Then there are “baby carrots”. After nouvelle cuisine became popular, they were developed to complement smaller sized entrees. A different type of carrot? No, just regular carrots whittled down to a more marketable size in specially developed tumbling bins.

Often new products result from better packaging. Back in 2000, food packers on California’s central coast discovered that if they washed lettuce in a mild chlorine solution before placing it in a porous plastic bag the lettuce would stay fresh for nearly three weeks. The result of that research can be seen in individually sized “salad packs” exported to Asian supermarkets and targeted at single people living alone.

“Chinese factories ship a lot of stuff to the US and most of it goes through Long Beach and San Francisco. The US does not send many manufactured goods to China, but those ships still have to go back. Shipping companies don’t want to sail across the Pacific with a boatload of empty containers so they offer deeply discounted rates.”

Many new food items on sale in Asia are produced in California by Asian immigrants like 61-year-old Craig Ito. In addition to cherries, peaches and nectarines, Ito also produces “pluots,” a cross between a plum and an apricot, tiny turquoise squash and pumpkins the size of pin-cushions. “Asia receives the best quality of fruit California produces,” explains Ito, “because a lot of what we ship is used for gifts or offerings on Buddhist holidays.”

Seventy percent of the dairy products exported from the US are from California. You might not think there would be much demand for dairy in Asia, but China is California’s second largest export market for fresh milk, milk powder and cheese.

“Because of limited arable land, it costs twice as much for China to produce milk,” explains Glenn Millar, director of International Business Development for the California Milk Advisory Board. “Why should China invest in upgraded infrastructure when California enjoys economies of scale and a 150-year history of producing a quality dairy products.”

Of course, China has access to regions that equal California’s fertility. China’s Yunnan province and Myanmar’s Kachin state contain some of the richest land in the world. But the key to agricultural success is not growing crops but getting them to market. In that respect California’s ports have a big advantage over places like Auckland or Christchurch because they are closer to Shanghai and benefit from America’s trade imbalance with China.

Yao Family Wines president Yao Ming promotes his Napa Valley cabernet at one of Shanghai’s annual food trade shows. Photo courtesy of California Center

Jay Behmke, managing director of Yao Family Wines, explained how this works. “Chinese factories ship a lot of stuff to the US and most of it goes through Long Beach and San Francisco. The US does not send many manufactured goods to China, but those ships still have to go back. Shipping companies don’t want to sail across the Pacific with a boatload of empty containers so they offer deeply discounted rates. It costs $1 to send a case of wine to China, less than 12-cents a bottle. It’s cheaper to send California wine to Shanghai than to New York,” he said.

Seven years ago, the economics of exporting convinced retired basketball star Yao Ming, now 37, to start a Napa Valley winery specializing in the cabernet grapes for which the region is famous. Last year, he produced 12,000 cases, 40% of which were sent to China where each bottle sold from $85 to $225.

“Yao learned about wine during his years playing basketball with the Houston Rockets and now serves as an ambassador for California’s Napa Valley, as well as the Special Olympics and other causes,” says Behmke. “His life is an endless sequence of VIP meetings. I just follow him around with a bottle of wine and make a lot of friends.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now. 

One reply on “Asian migrants grow rich exporting agri-products to China”

Comments are closed.