6-9-11—Kansas Corn Gets Firsthand Look at China Spring Crop Progress
After years as a significant export competitor in Asian markets, China has recently emerged as a
net corn importer, and most analysts expect Chinese imports to rise in the near term. The speed
and scale of this shift – and the potential of Chinese efforts to ramp up production – are major
uncertainties for corn producers and traders around the world.
These and other questions in the Chinese grain belt were explored last week by a U.S. Grains
Council survey team which got a firsthand look at the rapid progress of Chinese agriculture racing
to meet surging domestic demand.
Kansas Corn Commission communications specialist, DeEtta Bohling of Ottawa, Kan., returned
Saturday from China, where she surveyed the corn growing conditions and studied the Chinese
government policies that affect acreage, marketing and demand. Bohling joined participants from
six other states on the 2011 U.S. Grains Council (UCGC) Corn Tour which met with farmers,
traders and provincial officials in the northeastern China provinces of Heilongjiang and Jilin, both
major corn producing areas.
“Private and government storage facilities are prevalent throughout both provinces. Farmers have
sold most of their production at harvest. Private facilities have low inventories held for private
traders. Speculation is that government storage of corn is at low levels but there is no effective
way to measure it,” said Bohling.
Heilongjiang and Jilin provinces each produced 22 million metric tons (866 million bushels) of
corn in 2010. Roughly half of the harvest was consumed locally. The remainder was sold and
shipped to southern provinces where there is higher population density and feed consumption.
Corn planting acreage for 2011 is expected to generally increase marginally as farmers
experienced good prices in 2010 with increased demand. While some increased corn acres have
come from wheat and soybean acreage, there is also increased competition for fruits and
vegetables, particularly near urban areas. Some land was unplanted and attributed to increased
urban encroachment.
“China continues to balance many contending factors such as modern technology, information
technology, increasing mechanization and the aging agricultural labor force. There is a vast
exodus of young people to the city. We witnessed land loss due to urbanization,” said Floyd
Gaibler, USGC director of trade policy, who accompanied the group.
In both Heilongjiang and Jilin provinces, emergence is behind normal levels due to rainy weather
and low temperatures. The team also observed that germination was spotty in some locations
with skipped spaces and an occurrence of hand replanting.
While in China, the seven-member delegation also met with several corn farmers, trade partners
and end-users. The group visited grain storage facilities including Heilongjiang Zhaodong
Xiangyang Grain Storage and Sinograins storage facility. Visits were also made to COFCO BioEnergy Co., Ltd., an industrial processor; Jilin Fuyu Xian Fu Guo Grains Trading Co.; Jilin
Henong Animal Husbandry Group Co., Ltd., the largest commercial feed company in Northeast
China; and the Heilongjiang Shuangcheng Modern Agricultural Science and Technology
Demonstration Field. The delegation also had the opportunity to speak with farmers who run
small hog farm operations, using a modern corn-soy ration for feed.
“Hog prices are at historically high levels in both provinces. Backyard feed hog feeding is
declining and feeding operations are increasing in size. High corn prices are affecting profits.
There are concerns of new foot and mouth disease variants and could lower demand for soybean
meal and corn,” reported Bohling.
Other members of the mission included Gary Schmalshof from the Illinois Corn Marketing Board;
Dick Gallagher of the Iowa Corn Promotion Board; Ken Kindler from Dow AgroSciences LLC;
Tom Gillis from the Wisconsin Corn Promotion Board; Dennis Gengenbach from the Nebraska
Corn Board; and Lori Feltis of the Minnesota Corn Research and Promotion Council. The
delegation was escorted by Council staff Dick Kasting, director of strategic relations, and Floyd
Gaibler, director of trade policy.
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