Middle Class Explosion on the Horizon

March 1, 2017 12:00 PM
Bayer Agvocate Photo 2017

When populations move from a lower class to the middle class, a domino effect happens. When people have more money, they start purchasing goods, services and experiences that were once only dreams.

Currently a population boom is happening in geographies such as Africa and India that also have fast-growing economies, says Vikram Mansharamani, lecturer at Harvard University and Yale University.

“The middle class of the world is about to explode,” says Mansharamani, also author of Boombustology: Spotting Financial Bubbles Before They Burst. “It will affect many different sectors, which could potentially provide demand shock the world needs.”

What will change? Mansharamani says when people have more money, they tend to eat more meat, drink more wine, engage in more education, travel more and buy more cars and smart phones.

“There will be a gigantic explosion in consumption,” Mansharamani says.

This will have direct outcomes to farming and agriculture. “A little more protein demand equals a lot more grain demand,” he says. “More middle class spending could be really good for anyone involved with the commodity markets.”

Mansharamani spoke at Bayer’s AgVocacy Forum, which is taking place this week in San Antonio, ahead of the 2017 Commodity Classic. He also shared these global economic tidbits.

  • China consumes 60% concrete, 48% of copper, 54% of aluminum, 50% of nickel, 46% of steel, 23% of gold.
  • Within an hour, Nigeria will add 540 people and India will add 1,800 people.
  • The effects of climate change: Fundamentally a warmer planet equals lower yields—a 1-degree rise in temperature equals a 10% yield drop.

Watch a livestream of the 2017 AgVocacy Forum.

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Spell Check

Dennis Sena
Devine, TX
3/1/2017 04:37 PM

  I agree that we are going to to see an explosion in middle class descretionary spending. I don't agree with the argument of global warming. The decrease in ag products is correlated to a significantly smaller participation in farming and ranching. The younger generation doesn't care to participate in these types of low return jobs. So, in the future we'll see higher prices at the retail level due to shrinking supply.

bad axe, MI
3/1/2017 06:55 PM

  The first thing on this article is the P.R prop. for Bayer which is buying out Monsanto . I can remember in 1978 bob burgland which was Carters ag secretary saying the same thing , world population explosion, $6 dollar corn forever , plant fence row to fence row. One year later Carter's grain embargo , which lead to $ 2 dollar corn for 25 years. I had $2.25 corn contracts in 2006 , 10 years ago. When Trump talks about 20% percent import tax on all imports into this country it's going to take us back to $2.50 corn , because our importers are going to do the same to us. It's the same thing with this 1 trillion dollar road and bridge bill ,Trump is going to let the private sector put up all the money and were going to have to pay for it with tolls and taxes on plates. You will end up paying $5,000.00 for a farm plate for you grain truck. There may be a lot of demand for our crops but it doesn't mean it will be profitable to grow them. We could take all our corn to Africa and dump it on the beach and never have enough for them but they have no money to pay, it's been like that for decades. The trouble with the US everybody dose a lot of talking but has no answers on what were going to do with all this debt, 68 trillion to be exact. If you took the $48.000'00 on average that the 93 million people working in the US earn , it would take over 15 years to pay off the debt without interest. If you applied all $48.000,00 every year out of everyone, that means no food money , no Walmart, no trips, no house payments, no car payments, nothing everything goes to debt reduction.

Lincoln, NE
3/1/2017 08:12 PM

  Monsanto said the same thing 5 years ago. They do this to sale more product. Less corn = higher prices. www.afairmarketprice.com


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