FOR IMMEDIATE RELEASE CONTACT: Tricia Braid
June 9, 2011 (309) 827-0912
Bloomington, Ill. - After many 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.
Illinois corn farmer Gary Schmalshof of Adair, returned Saturday from China, where he surveyed the corn growing conditions and studied the Chinese government policies that affect acreage, marketing and demand. Schmalsof 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.
"China could become a very big competitor of ours with a little modern technology. They have the soil and the labor to make a run at us. I'm very impressed with the quality of land in China,” Schmalshof remarked. "We visited a grain buying facility. It was very modern. They could store 200,000 metric tons of corn there."
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. 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 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.
"We talked to a man and wife replanting some spots of corn that didn't come up. He would make a hole and she would drop the seed in. They worked as a team. I was very impressed with that,” Schmalshof said. "The height of the corn in Northeast China is similar to home. That’s pretty impressive because of all the hand labor that is involved."
Other members of the mission included 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; Lori Feltis of the Minnesota Corn Research and Promotion Council; and DeEtta Bohling of the Kansas Corn Commission. The delegation was escorted by Council staff Dick Kasting, director of strategic relations, and Floyd Gaibler, director of trade policy.
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