A Record Wheat Harvest? Or Not?

According to a grain industry news article, a netizen in China read reports that the wheat harvest was record-high in 2013, but when he called home his family members said production was actually down from last year. Did China have a big wheat harvest or not?

The National Bureau of Statistics said wheat output hit 131.9 mmt, up 1.5 percent from the previous year. Some analysts say the big harvest doesn't square with the facts. Wheat prices have risen about 4 percent since last summer's harvest, yet demand is weak. Flour prices have risen more slowly than wheat prices. Animal feed use of wheat is down this year. With weak demand and a record output, how can the price be rising?

Analysts also question the NBS reports of increasing area sown to wheat. They see large tracts of farmland being used to build roads, rail lines, and housing estates. Local authorities reclaim new land to replace the land lost to urbanization but the new land's quality is poor. One sarcastic industry analyst said he learned in his econometrics class that NBS statistics show that urbanizing vast tracts of land has no effect on the amount of cropland and doesn't affect grain output at all.

Moreover, conservation programs have been removing environmentally-fragile land from grain production.

There were also quality problems with the wheat in 2013. Hebei Province wheat quality testing reported that 69.8 percent of wheat was grade 3 or higher, down 28 percentage points from 2012. An industry person was quoted as saying the increase in Hebei's wheat output has no basis in fact.

Some private organizations (unnamed by the article) used satellite imagery to make their own estimates of the wheat crop. They estimated that wheat area fell by 0.5 percent and output was down 1.5 percent. They estimated output at 114 million metric tons, lower than the official estimate of 131.9 mmt.

Even the National Grain and Oils Information Center, a semi-governmental analysis group, revised their estimate of the wheat crop downward from 121.9 mmt to 120.6 mmt, said the article.

The data for some other commodities may be even more questionable. A rapeseed-processing company in Hunan keeps close tabs on rapeseed output in the 150-km radius surrounding their facility. In Li County, the official rapeseed area is reported as 663,000 mu, but the company thinks it's actually 527,000 mu. In Taoyuan County the actual area is a little more than one-fourth of the reported total and in Hubei's Jianli County, the actual rapeseed area is believed to be less than half the reported total.

According to the article, a Japanese publication recently ran an editorial urging China to start its economic reforms by reporting reliable data. Grain market analysts complained to the reporter that most analysis lacks any basis since there is no truthful data.

Some private organizations have begun collecting their own data, says the article. However, the government insists that NBS is the official source of statistics and officials sometimes say that private surveys are illegal.