Grower gets early look at China’s 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.
Nebraska corn grower Dennis Gengenbach of Smithfield recently returned from China, where he surveyed the corn growing conditions and studied the Chinese government policies that affect acreage, marketing and demand.
Gengenbach joined participants from seven 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.
“As you talk to the farmers in China, agriculture is their livelihood, just like ours,” says Gengenbach.
Heilongjian 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,” said Floyd Gaibler, USGC director of trade policy, who accompanied the group. “There is a vast exodus of young people to the city. We witnessed land loss due to urbanization.”
In both Heilongjian 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 Bio-Energy 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 Heilongjian 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.
“It’s important for us to understand not only our competitors but our customers and better understand their needs,” Gengenbach said. “We are going to have to share our knowledge with China in order to continue to be a good trade partner. We have to help them as long as they help us.”