A farmer quoted in an article about high pork prices recently observed that food for pigs costs more than food for humans.
As corn prices rise above wheat prices, feed mills are substituting wheat for corn in animal feed. Normally, the wheat price is about 10% higher than the corn price, but declining corn stocks and robust demand have pushed corn prices above wheat prices since April. Wheat is now about 150-yuan more per metric ton than corn.
In Gaotang County of Shandong Province, corn is now about 1.1 yuan/500g and wheat is 1.04 yuan/500g.
As pig prices soar, feed mills are turning to wheat. One livestock company in Henan has been buying mainly wheat--about 200 metric tons daily--since the wheat harvest came in last month.
Since 1998 there have only been two previous periods when the wheat-corn price relationship was inverted. One was during 2001 when wheat stocks were extremely high and wheat prices were depressed. A second was a 14-month period during 2007-08 when a big expansion of corn processing capacity in Henan and Jilin boosted the demand for corn.
Analysts say the government’s attempts to control the demand for corn by industrial processors since last October have not been very effective. Profits from industrial processing are said to have risen to 300 yuan per metric ton. The demand for corn remains strong, putting upward pressure on price. Some imported corn has arrived at Chinese ports, but has not entered the market. It’s not clear whether the imports will affect the price.
As corn prices rise above wheat prices, feed mills are substituting wheat for corn in animal feed. Normally, the wheat price is about 10% higher than the corn price, but declining corn stocks and robust demand have pushed corn prices above wheat prices since April. Wheat is now about 150-yuan more per metric ton than corn.
In Gaotang County of Shandong Province, corn is now about 1.1 yuan/500g and wheat is 1.04 yuan/500g.
As pig prices soar, feed mills are turning to wheat. One livestock company in Henan has been buying mainly wheat--about 200 metric tons daily--since the wheat harvest came in last month.
Since 1998 there have only been two previous periods when the wheat-corn price relationship was inverted. One was during 2001 when wheat stocks were extremely high and wheat prices were depressed. A second was a 14-month period during 2007-08 when a big expansion of corn processing capacity in Henan and Jilin boosted the demand for corn.
Analysts say the government’s attempts to control the demand for corn by industrial processors since last October have not been very effective. Profits from industrial processing are said to have risen to 300 yuan per metric ton. The demand for corn remains strong, putting upward pressure on price. Some imported corn has arrived at Chinese ports, but has not entered the market. It’s not clear whether the imports will affect the price.
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