Dim Sums: Agricultural Markets in China

Chinese leaders announced new farm subsidies this month that reflect worries about shrinking profits for scaled-up grain farms and farmer cooperatives. With costs escalating year by year, officials worry that newly-minted commercial farmers may abandon their land  if grain prices fail to keep rising.  Premier Li Keqiang squatted in a corn field for a photo-op with local officials and farmers  to announce a new one-time grain subsidy for 2021. In a carefully orchestrated visit to Jilin Province on June 15-16, 2021 Premier Li was photographed in a corn field where farmers assured him that another bumper harvest is expected this year. However, the farmers also complained that they were worried that increasing prices of fertilizer, fuel and other inputs will eat up profits from record-high corn prices.  According to Xinhua News Agency propagandists, Premier Li turned to comrades in his delegation and pronounced, "This is a key period for grain production; we m...

China's 14th five-year plan for Xinjiang Uighur Autonomous Region envisions great opportunities for development and westward-facing trade in the region--and the plan makes it clear that it has Xi Jinping's personal stamp of approval. The plan promises huge material economic progress, and it includes measures to ensure it is not impeded by social instability or threats to the communist party's leadership. The plan calls for expanding vocational training schools, reeducating ethnic minorities, and creating Islam with Chinese characteristics.  The Xinjiang plan is an exhausting catalogue of projects that goes on for pages and pages. They include high-tech industry clusters; petroleum- and coal-based chemicals; steel and nonferrous metals; upgrades of textiles and agricultural processing; new energy and e-commerce; industrial clusters and industry parks sprinkled across the desert; new roads, rails and canals crisscrossing the region; hordes of tourists; build new cities and s...

China's Heilongjiang Province announced that grain subsidies will be paid a month earlier than usual this year. Producer subsidies for corn, soybeans, and rice will be issued to Heilongjiang farmers by the end of August based on area they planted in the three crops.  Heilongjiang accounts for about 10 percent of China's grain output, and it produces the biggest surplus of grain to supply to other provinces. The producer subsidy policy is meant to encourage Heilongjiang farmers to produce by offsetting the province's low prices to generate better net returns. The amount of the subsidies will not be determined until August, but officials indicated the corn subsidy will be raised from last year while the soybean subsidy will be held steady. Last year's corn subsidy was 38 yuan per mu, and the soybean subsidy was set at 238 yuan per mu to stimulate more soybean production. This year the priority has switched to boosting corn output, with corn prices soaring and record corn...

Stratospheric Chinese hog prices helped float prices of feeds and meat upward last year, but sinking hog prices this year may be exerting a downward gravitational pull on other prices as hog farmers fall underwater. Hog prices reported by China's National Bureau of Statistics (NBS) in May 2021 were more than 50 percent below their early January level and are now below breakeven levels for wean-finish farms and at or near the breakeven point for farrow-finish farms in China. Farmers have been selling hogs in a panic as prices fall in the offseason for Chinese pork consumption. Last week's Beijing Xinfadi wholesale market report said mainly large carcasses are arriving--super-sized "second-time fattening" hogs--but very small carcasses are also arriving as farmers slaughter immature animals to cut their losses. Another industry report commented that a fattened hog brought 3000 yuan in profit last year, but now loses 1000 yuan.  Source: China National Bureau of Statist...