Dim Sums: Agricultural Markets in China

With China's grain and soybean imports on a record pace and agricultural prices at a high level, communist propagandists are blaming multinational companies for price-gouging. When Chinese officials blame someone else for a problem, they are usually trying to divert attention from their own mistakes. Wonder what they're hiding? On August 11, the Party's Economic Daily asked, " International grain prices are persistently high; are domestic grain prices stable? " This article cited the covid-19 pandemic, flooding, drought, supply chain disruptions, and soaring shipping costs for driving world food prices to a high level. This article called for China to increase its control of food supply chains, diversify its sources of imports, create major Chinese international grain merchants, and increase China's voice and price-setting power in global markets (all mentioned briefly in the 2021 "Number 1 Document." A week later, Economic Daily's " Corn m...

China's hog market boom has turned to bust, feeding worries in corporate boardrooms and government offices. As profits and equity vanished, pig producers have pulled back on feed purchases and trimmed expenses.  China's African swine fever (ASF) epidemic produced a 2-year M-shaped price cycle. The first cases of ASF appeared in August 2018, but hog prices were depressed until mid-2019 as farmers killed off their herds to avoid the epidemic. Prices soared about 150 percent in three months--reaching their peak in November 2019. Hog prices fluctuated in mini-cycles until they crashed during the first half of 2021. China's hog prices are now back where they started in 2018.  Average wholesale price from China Ministry of Agriculture and Rural Affairs. At these prices most hog producers are said to be losing money. Farms monitored by China's Ministry of Agriculture and Rural Affairs posted a 9.7-percent loss in May 2021. Most corporate hog-farming companies reported substant...

Some U.S. politicians warn of a Chinese takeover of American farmland, but the one big acquisition of U.S. farming assets may have been a bust for the Chinese buyer. At the same time U.S. politicians were moaning about land grabs, a Chinese meat scion got booted from his dad's company for arguing that the acquisition of Smithfield Foods was a boondoggle.  Last month Rep. Dan Newhouse of Washington State warned , “The current trend in the United States is leading us toward the creation of a Chinese-owned agricultural land monopoly.” National Public Radio got in early on the story by running  a May 27 segment  on the threat of foreign investors gobbling up U.S. farm fields and destroying rural communities, with a nod toward a Chinese company's ownership of Smithfield grain elevators as a prime example. Within days, politicians glommed on and numerous stories led with a warning that "China is buying up U.S. farmland," citing USDA statistics and the example of the Smithfi...

Chinese consumers have been clearing off supermarket shelves as they worry about new virus outbreaks and floods. Authorities insist supplies are ample and say there's no reason to hoard food, but citizens don't seem to believe them.  China is experiencing its biggest covid outbreak since the 2019-20 Wuhan outbreak. Though cases are few, these are the most geographically widespread and the delta variant is more transmissible than last year's version. China's health commission reported 85 new cases of covid-19 on August 4, bringing the cumulative total to 1,285. New domestic cases were spread across Jiangsu (40 cases), Hunan (9), Beijing (3), Shandong (3), Henan (3), Yunnan (3), and Hubei (1). Twenty-nine cases from abroad were discovered in Shanghai, Yunnan, Fujian, Guangdong, and Shandong.  The new covid outbreaks follow disastrous flooding in Henan Province July 17-24 that inundated fields, filled barns with mud, and drowned livestock. Storms from another typhoon foll...