Mold Limits China's Corn Supply

This year's corn has a high incidence of mold in many parts of Shandong, Henan and Hebei Provinces, restricting the amount of decent-quality corn coming on the market.

The moldy corn can't be used in most animal feed. According to the article, it is being used in poultry feed; since poultry have short lives the "death rate is low" from feeding them moldy corn. Alcohol and other industrial processors are able to use the low-quality corn but their profits and production are low right now. There is now a steep price discount for low-quality corn.

A moldy corn sample from a warehouse in Hebei Province (source: China corn net)

As temperatures rise the mold problem will become a bigger constraint on the corn supply. The hog industry is in a down period now with many producers losing money but the hog price is expected to rebound in the spring, also pushing up feed demand. This will likely push prices upward.

According to a China Grain Net article, in Guangxi feed mills are substituting wheat for corn in finishing hog feed due to the high price of corn. Wheat comprises 30%-40% of the formulation. It says that corn from north China (Shandong, Henan, Hebei) is being used only in poultry feed due to the high degree of mold.

A February 29 article says companies in Henan are buying corn cautiously due to the high rate of mold in the region. Alcohol companies are the main buyers.

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