Wednesday, October 30, 2019

Fight for Carcasses Drives Pork Prices Higher

The price of a lean hog carcass was three times its year-earlier price in Beijing's Xinfadi wholesale market on October 29, 2019. The Xinfadi market's weekly report described the nationwide competition for carcasses that is driving the price upward at an accelerated pace this month.

A daily average of 1,450 swine carcasses arrived in the Xinfadi market during the week of Oct. 19-25. The daily supply was up from its low point during the National Day holiday week early in the month, but it was 33 percent less than the 2,350 carcasses supplied daily during the same week in 2018. According to a monthly report for September, the number of carcasses arriving at Xinfadi during July was the largest in 5 years, but tight supplies resulted in a noticeable decline in carcasses arriving during August and September.

According to the reports, Beijing's market competes for carcasses transported all over the country. Most of the carcasses in the Beijing market come from the three northeastern provinces of Liaoning, Jilin, and Heilongjiang, hundreds of miles away. Some carcasses come from Yunnan Province--thousands of miles away in the southwestern corner of China. For a time in July, Yunnan was the main source of carcasses for the Beijing market because it had the lowest prices, but rising prices in Yunnan during August reduced the flow of carcasses from that provinces. Only a few carcasses come to the Xinfadi market from nearby Hebei Province and Inner Mongolia.

A September report said hog supplies in the northeast began to recover in March, but prices went up because transportation problems limited the number arriving in Beijing. The September Xinfadi report expected prices to decline after transport problems were resolved, but the rise in prices actually accelerated to an unprecedented pace in October.

Last week's report explained that prices are now rising because provinces in southern China--where production has not rebounded--have also been buying carcasses from northeastern provinces and Hebei.

The report said that increased slaughter weights are also limiting the supply of pork. Carcasses in the market are said to be about 33-40 percent heavier than usual weights. The delay of slaughter represented by heavier hogs not only reduces the number of carcasses available, but the added weight of these big hogs has a higher-than-usual proportion of fat and not that much more muscle than hogs. Thus, the market is now receiving a surplus of fatty carcasses and the premium for a lean carcass has doubled to 2 yuan or more per 500g since August, up from 1 yuan earlier in the year. Last week the price of fatty carcasses went down and the premium for a lean carcass went as high as 3.5 yuan/500g last week, but that trend appears to have reversed this week.

The Xinfadi market report says consumer demand for pork has fallen as the price has soared. Despite the limited number of carcasses available, about 10 percent are unsold and returned each day--sometimes 20 percent are returned. A September report said consumption by cafeterias and restaurants had declined the most, while purchases by consumers had not changed that much. The monthly report for September, however, said purchases by food service and individual consumers had dropped 30 percent.

Tuesday, October 22, 2019

China Food Security: Self-Sufficiency and Free Trade

China's food security strategy insists on self-sufficiency, yet China also claims to advocate liberalized global food trade, according to a white paper on China's food security released October 14, 2019.

The paper recites vague phrases like "keeping Chinese peoples' food bowls tightly in their own hands," a mantra that has been repeated as in speeches and communist party documents since Xi Jinping's ascension to party chief in 2013. The Chinese version of the white paper has an emphasis on self-reliance that is largely scrubbed out of the English translation. The Chinese version advocates a "path to food security with Chinese characteristics" (中国特色粮食安全之路) that is translated as "food security in China" in the English version.

The food security policy is stated in a series of opaque phrases that call for China to remain self-sufficient in grain most of the time by ensuring domestic production capacity while allowing for undefined "moderate" imports.
China's food security strategy, in Chinese and English
ensuring basic self-sufficiency of grain, absolute security of staple food
self-sufficiency based on domestic grain production
确保产能 guaranteed food production capacity
适度进口 moderate imports
科技支撑 technological support

Key measures for maintaining China's production capacity are encapsulated in another inscrutable couplet, "藏粮于地, 藏粮于技" (storing grain in the ground, storing grain in technology) translated as "sustainable farmland use and innovative application of agricultural technology to increase farmland productivity." Strict zoning, control of land use and government planning are featured measures. The paper claims that Chinese technology has achieved most of the dramatic increase in food output over the last 20 years.

The paper rattles off a series of statistics showing impressive gains in food availability, nutritional outcomes, and grain yields since 1996. Indeed, China's food availability and nutritional outcomes have vastly improved, and statistics have met or exceeded objectives set in the 1990s.

A third section of the paper boasts that China is playing a more assertive world in global food markets. According to the paper, China:
  • is an "active promoter" of liberalized food trade
  • has "worked hard to fulfill its WTO commitments"
  • has opened its food market to imports and foreign investment
  • is playing an active role in setting global food standards and rules governing food trade
  • aims to address global food insecurity through multilateral organizations
  • is setting up new mechanisms to promote trade through its "one belt, one road" initiative. 
The "new" food security policy is a more vague statement of a 1996 white paper, "The Grain Issue in China," that specified a 5 percent limit on imports in normal years for a specific list of grains, beans, potatoes, and soybeans. That limit was cast aside and soybeans were excluded from "grain" after soaring soybean imports blew through the 5-percent limit. The "new" policy uses vague language about "moderate imports," basic self-sufficiency and absolute security that are not clear in Chinese or English. Since 2013, the policy has not set a concrete self-sufficiency criterion, nor has it specified commodities.

The vagueness gives the policy an elasticity that allows officials to interpret it any way they want, depending on the circumstances and audience. With no numerical target, they can never miss it. The more assertive global role in reshaping food trade is a new addition to the post-2013 food security policy that aspires to give China a "voice" in global food markets and represents a subtle challenge to the United States whose government and companies China believes unfairly dominate markets and rule-setting at present.

While the 2019 white paper emphasizes government control and planning as key to food security, it also acknowledges that raising prices and cutting taxes on farmers were critical to improving incentives for farmers. The white paper does not consider the possibility that privatizing farmland might awaken rural credit markets and give farmers incentives to make their own investments in farmland instead of waiting for subsidized programs to do it.

China's white paper neglects to count the cost of its food security policies. Spending on agricultural programs has soared. Farm spending reported to the WTO rose from $30 billion in 2002 to over $200 billion in 2016. Most of the expenditure is on so-called "green box" programs that are exempt from WTO-imposed limits on farm spending. The most prominent are the program to build "medium and high standard fields" and irrigation infrastructure. In 2016, three direct payments to grain producers were lumped into one, renamed a "land fertility payment", and moved into the "green box." Payments to corn, soybean and rice growers are also kept hidden from prying foreigners and falsely declared "blue box" measures so they can also be exempt. This year's direct payment to soybean growers in Heilongjiang Province is equal to about half of the gross value of the crop.

China claims to have "reformed" its support price program for wheat to make market-oriented purchases predominant, but this year's government purchases amounted to 30 mmt out of 70 mmt of wheat procured. In Anhui Province half of the wheat marketed this year was purchased through the minimum price and the local news paper claimed the support price effectively raised prices for farmers by 10 percent.
The white paper trumpets China's success in "reforming" support price programs for corn, soybeans, rapeseed, and cotton. These were ill-conceived, costly programs begun in 2008-10 that exported instability to world markets by prompting import surges followed by years of suppressed imports as officials sought to offload massive stockpiles. The full cost of these programs is not counted in its reporting to the WTO. In the most egregious example, the 167 mmt of corn sold from the "temporary reserve" stockpile the last three years cost an estimated $31.7 billion, including costs of storage, interest and losses incurred by selling grain at prices 18% to 38% below their purchase cost. This is how China "works hard to fulfill its WTO commitments."

The 1996 white paper promised to reduce waste of grain, but holding excessive grain stocks--another core "food security" policy--is hugely wasteful. Large areas of land and chemical inputs are used to produce grain that is stored in hundreds of warehouses where it rots or is eaten by rats and insects. Authorities have kept secret the results of a nationwide audit of grain reserves carried out this year, but there are hints that much of the grain is poisoned by mycotoxins and heavy metals. After the audit authorities published admonitions that grain reserves must not threaten "food safety."

China's 1996 white paper promised to reduce crop production costs, but instead the self-sufficiency policy has resulted in soaring costs and prices of Chinese food commodities. China's wheat price, for example, has drifted far above U.S. wheat prices. China's wheat price was more than double the U.S. price in 2016 and was 80% higher in 2018. The difference is maintained by China's price floor and tight control on imports using a restrictive import quota system.
The 2019 white paper celebrates China's rise in meat consumption. While authorities have myopically sought to stabilize grain markets at huge cost, the country's livestock production is routinely rocked by boom-bust cycles, diseases like avian influenza and African swine fever, and food safety crises like the melamine adulteration of milk. Grass roots veterinary services and animal health have been neglected for decades. Gyrations in the Chinese livestock market also spill over into the world market by creating unanticipated ebbs and flows in China's demand for imported meat.
The 1996 self-sufficiency policy directly led to environmental costs that remained hidden for years. The 1996 white paper called for farming "wasteland" on mountainsides, grassland, and river bottoms, which had to be reversed later via a subsidy to retire erodible land. The 1996 paper also called for cultivating abandoned factory and mining sites--an initiative that ignored the possibility that such sites are often polluted with lead, cadmium, and arsenic. Authorities hid the contamination of rice with cadmium from metal smelting for years. Subsidized chemical fertilizer and pesticides led to excessive use, huge run-off and eutrophication of rivers and lakes.

"Enlarging irrigated areas" was a solution offered by the 1996 white paper, but underground aquifers were pumped dry to grow wheat in north China and rice in Manchuria. Land is now being retired in both regions to cope with the problem. High prices guaranteed by a price support prompted farmers to plow up grasslands to plant corn. All these problems were created by China's food security policy despite a principle of "realizing sustainable development" promised in the 1996 white paper.

The white paper presumes that the communist party's policy is the only way for China to be food-secure. However, several East Asian neighbors achieved dramatic improvements in living standards years before China. In the years after World War II, U.S. advisors designed land reforms, farmer cooperatives, and rural credit systems in Japan, South Korea, and Taiwan, laying a foundation for improvements in farm production. U.S. advisors were invited to China in the 1940s by the Nationalist leadership, and might have helped develop the mainland's agriculture decades earlier if civil war had not brought their efforts to a halt. Communist China leaders today are still working on many of the same agricultural problems identified by U.S. advisors during the 1940s.

Friday, October 18, 2019

China Pork Output Plummeted 42 percent in Q3 2019

China's pork output is down 17 percent in Q1-Q3 2019, but the decline accelerated to 42 percent during the third quarter, according to data released by the country's National Bureau of Statistics. September consumer price data show an increase in all meat prices, led by a 69-percent increase in pork costs.

The Bureau's economic report on the third quarter of 2019 included estimates of meat output for the first three quarters of 2019 and percentage changes from a year earlier. The country produced 31.8 million metric tons of pork in the first three quarters of 2019, down 17.2 percent from the same period in 2018. Poultry output was 15.39 mmt, up 10.2 percent. Beef and mutton output were a combined 7.9 mmt and rose at a slower pace of 2-to-3 percent. Egg output increased 5.5 percent. The Bureau did not report any animal inventories or number of animals slaughtered.

China Livestock Production, Q1-Q3, 2019
Item Q1-Q3 output Change from year earlier
Million metric tons Percent
Pork 31.81 -17.2
Poultry 15.39 10.2
Eggs NA 5.5
Beef 4.58 3.2
Mutton 3.3 2.3
Source: China National Bureau of Statistics. 

The fall in pork output accelerated during the third quarter. Pork output during Q3 2019 was 7.1 mmt, down 42 percent from Q3 2018 (calculated from the Q1 and Q2 numbers reported earlier this year). The 42-percent decline in pork produced nearly matches the 41.1-percent year-on-year decline in swine inventories reported for September by the Ministry of Agriculture and Rural Affairs.

Slaughter of hogs at designated slaughterhouses reported by the Ministry of Agriculture and Rural Affairs shows a 13.8-percent decline in slaughter for the first nine months of 2019. However, the year-on-year decline in slaughter clearly accelerated to 25.7 percent in August and 35.8 percent in September 2019 from a year earlier as impacts of shrinking swine numbers began to affect the supply of hogs. There are anecdotes about increased slaughter weights, but no statistics are reported.

Hogs slaughtered at "above-scale designated slaughterhouses", 2018-19
2018 2019 Change
Million head Percent
Jan-Sept 180.07 155.24 -13.8
Jan 22.9 24.3   6.3
Feb 17.5 12.9 -26.1
Mar 19.2 18.6 -3.2
Apr 21.2 18.4 -13.0
May 21.4 19.2 -10.3
Jun 19.6 17.6 -10.2
Jul 19.5 17.3 -11.3
Aug 19.7 14.6 -25.7
Sep 19.2 12.3 -35.8
Oct 19.5
Nov 20.1
Dec 22.9
Source: China Ministry of Agriculture and Rural Affairs.

A broad-based rise in meat prices is evident in the National Bureau of Statistics' report on September 2019 consumer prices. China's CPI for food was up 11.2 percent from a year earlier but the nonfood CPI was up only 1 percent. Pork led the way with a 69.3-percent increase in September consumer prices from a year earlier. Beef was up 18.8 percent, mutton was up 15.9 percent, and poultry was up 14.7 percent.

China Consumer Price Index, September 2019 
Item Change from a year earlier
Nonfood 1.0
Food 11.2
Pork 69.3
Beef 18.8
Mutton 15.9
Poultry 14.7
Fish/shellfish 2.9
Eggs 8.2
Dairy 1.1
Grains 0.6
Edible oils 2.3
Fruit 7.7
Vegetables -11.8
Source: China National Bureau of Statistics.

Wednesday, October 16, 2019

Beijing Pork Prices Resume Skyrocket Trajectory

Beijing pork prices shot upward again in October after officials pulled out all the stops to stabilize them ahead of the Oct. 1 National Day holiday. A comparison with Beijing market prices from the "blue ear" disease panic in 2007 shows that the African swine fever epidemic is the biggest-ever disruption of the world's biggest pork market.

Ministry of Agriculture and Rural Affairs figures showed a worsening supply situation. The Ministry reported that the inventory of swine during September was down 41.1 percent from a year earlier while the sow inventory was down 38.9 percent. The Ministry's figures tracking "above-scale" slaughter facilities showed the number of hogs slaughtered in September was down 35.8 percent from a year earlier.

Daily price data from Beijing's Xinfadi wholesale market show that pork prices stabilized in September following an August 30 order from Vice Premier Hu Chunhua to keep pork markets stable during the Mid-Autumn Festival and the 70th anniversary of the Peoples Republic of China celebrated October 1. Authorities injected 40,000 metric tons of pork reserves into the market last month. However, prices began rising the day after National Day and climbed 32 percent during the first two weeks of October, showing that officials cannot dictate prices for very long. The average price for a lean carcass at Xinfadi market was 21.75 yuan per 500g on October 15, up 125 percent from the price a year earlier in the same market.
Average prices quoted by Beijing's Xinfadi wholesale market
Prices for different parts of the pig rose to varying degrees. Fatty carcasses have a lower price than lean carcasses, but their price on October 15 was 140 percent higher than a year earlier. Livers went up 120 percent. Prices for bellies and hindquarters were about double their year-earlier prices. Ribs were up 81 percent. Prices for other parts like tails, feet, kidneys, and brains rose by 30 to 60 percent from a year ago.

Year-on-year pork price increases, 
October 15, 2019
Beijing Xinfadi Wholesale Market
Oct. 15, 2019
Change from a year earlier
Dollars per lb. Percent
Carcass (lean) 2.78 125
Carcass (fatty) 2.53 144
Belly 3.26 104
Hindquarters 2.88 105
Ribs 4.29 81
Feet 2.69 40
Tail 5.12 60
Ears 3.26 31
Brain 5.12 60
Stomach 2.69 53
Heart 1.41 29
Liver 1.41 120
Kidney 3.71 61
Calculated from prices at
Prices per 500g converted to dollars per lb. using exchange rate of 7.0868 RMB/$.

The historic nature of this year's pork price increases is evident from a comparison with the trajectory of prices in the Xinfadi market during 2007-08 when pork supplies were disrupted by a "blue ear disease" (Porcine Reproductive and Respiratory Syndrome) epidemic--China's previous most-notorious pork supply crisis which began the meme about pork prices influencing China's CPI.

The chart below compares the daily price for a lean carcass in the Beijing Xinfadi market during 2007-08 and 2019. Interestingly, prices in 2007 and 2019 began close to 17 RMB/kg in January of each year (with no adjustment for inflation). In 2007, the "blue ear" disruption of pork supplies caused rapid rises in pork prices beginning in April and May. The Beijing market's pork price reached 20 RMB/kg by August that year, 75 percent higher than the price in March. Prices eased in September-October before peaking at 22.5 RMB/kg in February 2008, more than double the March 2007 price. Those increases in pork prices were considered a serious crisis at the time.

During the ASF disruption in 2019, the Beijing market's pork carcass price was steady at about 20 RMB/kg in March-May, but the increases from August to October were much more dramatic than the 2007 pork price increases. Prices rose rapidly in August, stabilized in September--as noted above--and then rose dramatically in October. The October 15, 2019 price of 42.5 RMB/kg is the highest-ever in the Beijing market and up about 150 percent from the price on January 1. This pork shortage makes the 2007 event look like a blip in comparison--and the full effects have not run their course.
Comparison of prices tracked in 2007-08 and 2019 from

Monday, October 14, 2019

Wheat Program Limits Purchases

China's minimum price for wheat will remain steady at 2240 yuan/metric ton in 2020, but a new 37-million-metric-ton limit on purchases at the minimum price will be introduced.

The limit on wheat purchases will be divided up into two batches, according to an announcement issued by the Administration of Grain and Commodity Reserves and four other departments. A basic purchase limit will be set at 33.3 mmt. If purchases reach 90 percent of the initial limit, provincial branches of Sinograin--the government's grain reserve company--can make recommendations for allocating an additional 3.7 mmt to provinces. The Administration of Grain and Commodity Reserves will make a determination based on monitoring of production, market prices, volume of farmers' unsold grain and other factors. If needed, the Administration will post the allocations of the second batch of reserve purchases on a web site.

Wheat purchases at the minimum price were 30.9 mmt during 2019. Purchases were much higher than in recent years because production increased and demand is weak this year, so prices fell to the minimum level in many regions. Large portions of the 2018 crop were below quality standards due to heavy rains, but there were few quality problems this year. The last time minimum-price wheat purchases exceeded 37 mmt was in 2009.

No specific reason was given for placing a limit on purchases. China may have introduced the limit to bring the program into compliance with its WTO commitments on domestic support following the United States' challenge of China's minimum price programs for wheat and rice.

China also held the minimum price for rice steady this year, but no limit has been imposed on purchases of rice to date.

China's Farm Investment Fizzles

Investment in China's farming and agricultural processing sectors is down this year, according to figures released by China's National Bureau of Statistics, a development at odds with policies focused on pumping up investment in the sector.

Fixed asset investment in farming, forestry and fishing during January-August 2019 was down 3 percent from the year-earlier period. Investment in primary processing of agricultural products (grain milling, oilseed processing, livestock slaughter, etc.) was down 9.4 percent from a year earlier, investment in food manufacturing was down 2.2 percent, and investment in textile manufacturing was down 5 percent. The data do not include rural households, but this has little impact since other data show that rural households don't make many agricultural investments.

China fixed asset investment, January-August, 2019: year-year change
Sector Percent change
Farming, forestry, fishing -3.0
Primary processing of ag products -9.4
Food manufacturing -2.2
Textile manufacturing -5.0
Source: China National Bureau of Statistics web site. 

Overall fixed asset investment increased 5.5 percent during January-August 2019. The Bureau says this was 0.2 percentage points faster than in 2018. These rates are much slower than 20-to-30 percent annual growth in fixed asset investment during China's peak growth years up to 2012.

Investment in manufacturing during January-August was up 2.6 percent from a year earlier, slower than 9.5 percent growth in 2018. Investment in services was the most robust, up 7.3 percent this year.

The slowing of agricultural investment in 2019 was remarkably abrupt. In 2018, fixed asset investment in agriculture had grown 12 percent--faster than overall growth--but this year it has fallen 3 percent. Agriculture's share of Chinese investment has historically been low, but its share had risen above 4 percent during 2016 and 2017. Agriculture's share of investment has now fallen to 3.5 percent in 2018 and 2.7 percent in January-August 2019.

Monthly figures on growth in fixed asset investment in "primary industry" indicate a sudden slowing of investment in 2019. "Primary" industry (agricultural) investment grew about 12 percent year-on-year through the end of 2018. Growth then slowed to 3.7 percent in February, 3 percent in March and posted slight declines in April to July. The 3.4-percent decline in August is the largest decline reported this year, so far.

Chart shows year-on-year growth in fixed asset investment in primary industry, by month.
Data from China National Bureau of Statistics.

The plateau in agricultural investment is at odds with the "rural revitalization" and other Chinese policies that call for boosting credit to new-type farmers, subsidizing upgrades of "medium and low standard fields", upgrading equipment, and building agricultural industrial parks. The decline in agricultural processing and textile investment is also at odds with policies to increase links between farmers and value-added processors and to build a new textile industry in Xinjiang Autonomous Region which now produces 80 percent of the country's cotton.

The fizzling of agricultural investment is, however, consistent with reports of new-type farmers abandoning their leased land after finding farming tougher going than they had expected.

Thursday, October 10, 2019

China's Crayfish Boom

China's crayfish production has skyrocketed as local officials around the country rolled out production plans and subsidies to grow the crustaceans in rice paddies. While consumption is booming too, farmers drive the price to seasonal lows when most harvest their crawdads at the same time in June. The "Voice of Rural China" radio broadcast said 80 percent of new crayfish farmers are losing money and need to think more carefully about the business.

China's crayfish output nearly doubled in two years, according to a Ministry of Agriculture report on crayfish industry development released a few months ago. Production reached nearly 1.64 million metric tons in 2018, up 45 percent from the previous year. This came on top of a 32.5-percent increase in 2017. After some farmers "expanded blindly," the industry is now due for a shakeout, Voice of Rural China said.
Source: China Ministry of Agriculture and Rural Affairs, Crayfish Industry Development Report.

Crayfish are produced in 21 Chinese provinces, according to the Agriculture Ministry report, but five provinces (Hubei, Hunan, Anhui, Jiangsu, and Jiangxi) account for 94 percent of output. Most are rice-growing south-central provinces. Hubei Province alone raised 812,400 metric tons in 2018, about half of China's output. (By comparison, Louisiana--the largest U.S. crayfish-producing state--produced close to 58,000 metric tons in 2017.) Hubei also has 7 of the top 10 crawdad-growing counties in China.

Most of the crayfish are purchased from restaurants, specialty shops, night market vendor stalls, medium- and high-end restaurants, and online vendors. E-commerce giants T-mall and are engaged in both sales and logistics. Cold chain makes it possible to ship crayfish around the country within 24 hours.

China is a net-exporter of crayfish, but exports are falling. China's exports of crayfish peaked at 23,309 metric tons in 2016 and fell to 10,801 mt in 2018. Last year's exports went mainly to the United States and western Europe. The average export price was $17.48/kg, up 55.5 percent from the previous year. Imports rose 60 percent in 2018 to 2,394 mt--still much less than the export volume--valued at $8 million, according to the Agriculture Ministry's report.

The crayfish are raised mainly in 840,000 hectares of flooded rice paddies and in 200,000 hectares of ponds. In some provinces they are raised in ponds with lotus or water chestnut. They can be raised in ponds with aquatic plants covering 40 percent of the surface, combined with freshwater crabs, and fed pelleted feed. In Shanghai and Hubei, some farmers raise crayfish in enclosed sheds during the off-season.

Hubei expanded its crayfish production area by 32.5 percent in 2018, but others expanded even more aggressively: Anhui was up 67.5 percent and Hunan and Jiangxi increased their area by 75 percent.

The Ministry of Agriculture report reveals extensive efforts by local officials to promote the crayfish industry. In 2018, local governments issued 30 documents that included development plans and support policies.

Hubei Province--already the top producer--issued a 3-year action plan to promote combined rice-crayfish production. More than 30 Hubei cities and counties issued grants for crayfish production projects. Anhui Province and many cities and counties issued similar plans. In Shandong Province, Yutai county made crayfish a focus of economic development and created a county "ecological brand" for crayfish. In Henan Province, Huangchuan county is subsidizing crayfish as an antipoverty program.

Support includes government grants for "demonstration districts," earmarked bank loans, subsidized insurance, and technical training. Grants often finance upgrading of rice paddies and engineering projects. In Hubei, banks are granting loans of 30,000 to 300,000 yuan. A county in Jiangsu Province is experimenting with online loans of up to 300,000 yuan. Three provinces are subsidizing between 30 and 80 percent of insurance premiums for crayfish producers. Other support includes R&D, training classes, and model farms. Officials have set up crayfish markets, festivals, created local brands, and built crayfish "towns" and industrial parks to promote the industry.

Voice of Rural China blamed farmers' problems on the seasonality of marketing and lack of negotiation power. The rice-crayfish model dictates that the critters be harvested in May and June, and prices plummet as large volumes come on the market each June. Voice of Rural China said the big wedge between farm prices and retail prices shows that farmers lack negotiation power. The broadcast advised farmers to look for ways to stagger production over the year and increase processing and storage of crayfish.

An article in a U.S. aquaculture publication last year hyped potential for American exports of crayfish to China, but a wary U.S. farmer recalled how visiting Chinese groups took Louisiana's rice-crayfish production model home and became a competitor. The farmer waved off the export opportunity, commenting that China's crayfish industry "is not welcome here."