China's Ownership of U.S. Farmland--not much

There was one new Chinese investment in U.S. farmland in 2020, according to the USDA's latest report on foreign farmland holdings--not exactly a "land grab."

The USDA report said 194,179 acres of farmland held by "China" was valued at $1.86 billion at the end of December 2020. These holdings were composed of 266 parcels held by 82 investors. The number of Chinese investors increased from 81 to 82 between 2019 and 2020, and their holdings increased by 3,127 acres. 

Source: USDA, Foreign Holdings of U.S. Farmland
and Farms and Land in Farms.

The China land holdings were 0.5% of the total of 37.6 million acres held by foreigners in 2020. Chinese holdings were 0.02% of the total U.S. farmland area of 896.6 million acres reported in a separate USDA release.

Chinese holdings of U.S. farmland had been stagnant since 2013 until last year's 3,127-acre increase. The leap in Chinese landholdings between 2012 and 2013 reflected the acquisition of Smithfield Foods by the WH Group holding company. A public list obtained by a FOIA request in 2014 revealed that there were 50 Smithfield farms in North Carolina, Virginia, Texas, Missouri and Utah among the "China" holdings. The concentration of "China" holdings in 2020 in southern states and in "other agriculture" (i.e. pig farms) corresponds to the predominance of Smithfield farms. "China" holdings of cropland totaled only 34,287 acres in 2020.

Based on USDA, Foreign Holdings of U.S. Farmland Through December 31, 2020.

Some warn that inaccuracies in the USDA data hide the true extent of Chinese holdings, but examination of the 2014 list of parcels indicates that the the report may actually overstate "China's" holdings. Back in 2014, over 120 "China" parcels were held by a Hong Kong real estate development company. A number of individual "China" owners had names that use spellings common in Taiwan, as did the officers of a company that owned multiple parcels in the Pacific Northwest. Formosa Plastics--apparently a Taiwan company--has owned a number of parcels since the 1980s. 

The Chinese company WH Group's ownership of 50 Smithfield farms does not threaten the U.S. food system. Last year a fight broke out between the chairman of WH Group and one of his sons who criticized the Smithfield acquisition as a vanity project that distracted the company from its core business and lost money. The son was booted from the company.

China's foreign investment in agriculture is focused mainly on neighboring countries in Southeast Asia, eastern Russia, and Central Asia. Moreover, the pace of China's overseas investment in agriculture, forestry and fishing decelerated in 2020 to 1.1 billion dollars, a third of its peak in 2016, according to China's commerce ministry. Foreign investment in food manufacturing in 2020 was $490 million, investment in textile manufacturing was $690 million, and investment in apparel manufacturing was $340 million. The cumulative stock of overseas investment in ag, forestry and fishing reached $19.4 billion in 2020 (less than 1 percent of the total stock of foreign investment).

Source: data from China Ministry of Commerce. 

Grain Corruption and "Air" in the Granaries

China's disciplinary inspectors are cracking down on corruption in the grain marketing system--a long-time target of corruption probes. It's unclear what's really going on here but reports of phony transactions and fake reporting raise questions about the true state of China's grain reserves.

Earlier this week China's Central Commission for Discipline and Inspection  (CCDI) celebrated its take-down of so-called "tiger" Xu Baoyi who is a former deputy director of Sinograin, the state-owned company that manages China's grain reserve. Three deputy directors of Sichuan, Liaoning and Hunan Provincial branches of Sinograin were also caught in the dragnet. The CCDI's annual work meeting identified corruption in grain procurement and sales as one of its priorities. 

Testing rice at a granary in Jiangxi Province. Source: Xinhua.

Highlights from 8 cases reported yesterday by the Liaoning Province discipline commission:

• The party secretary of a granary in Anshan City sold 363 tons of soybean oil without authorization in December 2019, emptying out the city's reserve. He falsely reported that the oil was still in the tanks and continued collecting subsidies for managing it. 
• In December 2020, the manager of a rural granary in Huludao shifted grain reserves without authorization, and his deputy presented two conflicting sets of documents to investigators. 
• In 2019, the director of a granary in Fushun City reclassified rice in his reserves as "mildly unsuitable for storage" and sold it without approval from upper levels. 
• In April 2020, the manager of a Panjin City granary decided the transfer 1,000 tons of grain from city to provincial reserves without approval. This grain was subsequently double-counted as both city and provincial reserves. 
• The other cases involved mainly financial corruption by misappropriating funds for grain purchases, making unauthorized loans, and using their positions to pressure companies to sign leases for commercial space.

A TV series "Zero Tolerance", produced by the CCDI's propaganda department and China Central TV, was said to "shock" the public by revealing brazen grain corruption shenanigans. CCDI said their investigation of grain storage stations in Jiangsu Province's Yizheng City discovered grain stations and grain trading companies had transactions with directors' personal accounts. It was common to pay farmers for "grade 3" grain that turned out to be "grade 2" after testing. The higher grade raises the price by a few pennies per kilogram, but it turns out to be a lot of money for thousands of tons. The grain station director pocketed the price difference. The "circular grain" scam takes advantage of the government's price support program by fraudulently declaring grain they had already purchased at market prices to be "market intervention grain" and repurchasing it at the support price. The grain station collects the higher support price and gets a management fee from the government. In some grain stations, they loaded a truck with grain at another warehouse, brought it to the front door pretending to be farmers with fake id cards, and resold the grain at the support price. 

Illustration of how granaries purchase grain at market prices, declare it to be "market intervention grain" valued at a higher support price, collect the price premium and a government management fee. 

In an October 2021 summary of grain corruption tactics, CCDI labeled corrupt grain officials as "big rats" who "rely on grain as their food". One tactic is to illegally sell grain from reserves, then use the funds to speculate on the futures market with the hope of buying back the grain later. "Air grain" is when granaries agree with a grain trader to fabricate a transaction, issue a forged invoice and fake accounting records, then create another phantom transaction selling it back to the trader. CCDI said a common tactic is to falsely claim grain has excess moisture, mold or foreign material to downgrade its value.

The grain reserve system is a fat target for corruption. The Agricultural Development Bank of China (ADBC) had an outstanding balance of 1.78 trillion yuan (about $274 billion) in loans for buying and storing reserves of grain, edible oils and cotton reserves at the end of 2020. Billions have quietly disappeared into the maw of the semi-official grain marketing system over the decades. The ADBC has actually cut back on commodity lending over the past decade after disastrous grain and cotton price support and stockpiling programs became a giant money-suck. The bank still claims to finance half the grain procured in major production regions and most of the cotton procured in Xinjiang. Grain stations often advertise they have "money waiting for grain" in the procurement season. ADBC allocated 300 billion yuan to purchase last fall's grain crop. 

A reform in 2001 supposedly separated government procurement functions from commercial grain business to address chaos and corruption in the system. But the "Zero Tolerance" TV investigation reported this reform was never truly carried out in many areas. In Yizheng City, CCDI said local grain bureaus and commercial grain trading companies were actually one and the same entity, and there was no oversight of grain business.

Grain officials are not the only "tigers" being punished. Some speculate that the corruption sweep is a new effort to eliminate opposition to Xi Jinping, purge associates of Xi's erstwhile rival Bo Xilai, and/or forestall a coup. The grain corruption campaign against low-level officials could be a smokescreen to distract attention from factional warfare at upper levels.

The grain corruption campaign began last year. There were hints in March 2021 when the Food and Commodity Reserve Administration scolded unnamed grain officials for failing to fulfill their responsibilities. A retired official of the national grain reserve administration was expelled from the party this week but anti-corruption goons began investigating him in July 2021. The grain corruption investigations began in earnest last August, and announcements of arrests began appearing in October-December 2021. This week announcements of corruption investigations of grain officials in various cities and counties have appeared nearly every. 

The CCDI fretted that grain corruption had continued after Xi Jinping launched his anti-corruption campaign nine years ago. Cases involve conniving between state-owned grain enterprises and supervisory departments, CCDI said, and the cases are big and "serious."

The surge in grain corruption cases coincides with a freak-out on food security by top-level Chinese officials that has been escalating since the onset of the pandemic in 2020. That was also the year a purportedly massive excess corn reserve was depleted and corn prices were climbing rapidly. In April 2020 there were reports that a meeting was held calling for a boost imports of grain and cotton to restock reserves. Corn and wheat imports promptly accelerated.

In 2021, there were constant reminders about keeping rice bowls firmly in Chinese hands and a new Party-Government responsibility program that grades officials on their food security bona fides was launched. This month provincial officials dutifully recited objectives for increasing grain production this year. 

Is it possible that China's top officials discovered that their granaries were filled with more "air grain" than they thought? Did thousands of phony transactions trick top officials into complacency about grain reserves?

There have been several occasions over the past decade when grain procurement reports claimed to have purchased impossible amounts: nearly the entire wheat crop in Henan Province one year, the entire national cotton crop several years, and all the corn grown in northeastern provinces during 2015. In parallel, there were implausible auctions of 100 million tons of corn during 2019 that sold out every week--these were probably fake transactions to take nonexistent grain off the books. 

One thing that's becoming clear is that the more we learn about China, the less we know. 

Grain-Oilseed Imports Hit 167 MMT in 2021

China's imports of grains exceeded 65 million metric tons (mmt) in 2021, according to data reported by its customs administration. Grain imports were up nearly 40 mmt from 2020. The import boom was led by an increase in corn imports from 11.3 mmt in 2020 to 28.3 mmt in 2021. 

Source: analysis of China customs data.

Grain imports filled China's tariff rate quotas (TRQ) for the first time. Corn imports were nearly four times the 7.2-mmt TRQ which was long believed to be the maximum but no longer appears to be relevant. Wheat imports reached 9.77 mmt, slightly more than its TRQ. Rice imports totaled 4.92 mmt, just below its TRQ. 

China's imports of soybeans reached 96.5 mmt in 2021, down from 100 mmt in 2020. China imported 5.5 mmt of rapeseed, peanuts, sunflower seeds and other oilseeds. Thus, total oilseed imports reached 102 mmt, and the sum of grain and oilseed imports was over 167 mmt.

Source: analysis of China customs data.

Grain and oilseed imports were equal to 19 percent of the country's total supply (domestic production plus imports). That's up from 17 percent in 2020 and 14-15 percent during 2015-2019.

Source: analysis of China customs data.

The official commentary from Economy Daily noted that the combined imports of grains and soybeans exceeded 160 mmt in 2021. The article acknowledged that "moderate" grain imports are needed to fill structural shortages in view of the country's large population and scarce land. Economy Daily blamed the pandemic for disrupting grain shipments, prompting some countries to stockpile grain, and others to cut of exports. It's hard to see how these factors caused China to nearly double its grain imports two years in a row. Moreover, China seems to be the only country obsessed with stockpiling grain and banning fertilizer exports.

Economy Daily fretted that rising grain imports could leave China vulnerable to transmission of global price fluctuations to the Chinese market or changes in policy or production shortfalls in exporting countries. Economy Daily recommended encouraging domestic companies to invest abroad, nurturing grain traders who can influence international prices, diversifying the sources of grain imports and varieties imported, in order to stabilize imports and keep China on the initiative. 

China's Covid Food Import Controls: "Jump!" "How High?"

In 2020, China adopted a system to test imported "cold chain" foods for covid-19 virus at the border; disinfect all imported food shipments at the border; track the shipments as they move through the marketing chain; segregate imported foods in storage, transportation and retail; and require QR codes at point of purchase. The actual science behind the program is squishy, and it's not clear that any live covid-19 virus has ever been detected. The crisis gave Chinese regulators cover to impose onerous requirements that few exporters have complained about.

China's imported cold chain food program requires imports to be segregated
from domestic products with a QR code that allows consumers
to view required certificates of inspection, covid tests, and disinfection. Source: Xinhua News.

In the early months of the pandemic Chinese authorities tried to dispel concerns about risk of covid-19 transmission by domestic food shipments. A circular written by a Chinese scientist posted on local government web sites in May 2020 sought to quash rumors that rice, oranges and other foods from Wuhan--the center of the first covid-19 outbreak--were unsafe due to contamination with the virus. The scientist assured readers that the virus could not survive on food nor be transmitted by food because the virus needs a human host to survive. The circular cited WHO and U.S. university studies showing that risk of transmission on transportation equipment and packaging is also insignificant because the virus cannot survive for long periods and viral loads are not large enough to infect humans. The scientist pointed out that essential oils emitted by the skin of fruits and vegetables act as natural disinfectants that can inactivate the virus. Part of the text from this circular appeared word-for-word in an article issued by China's official Xinhua press later in the year debunking "Ten food safety rumors in 2020." "Food from Wuhan is unsafe" was rumor no. 8 in the article. 

In June 2020 Chinese authorities decided to single out imported food as a risky vector of virus transmission. A covid-19 outbreak in Beijing that month was purportedly traced to a cutting board in the city's Xinfadi wholesale market. Authorities blamed Norwegian salmon--a product that had previously been targeted to punish Norway--although no conclusive evidence was ever found. A week-long nationwide food market testing program was launched the following week. Tests focused on imported food, workers who handled it, and the surrounding market facilities. No positive results were reported.

Authorities began their campaign against covid contamination of imported food in earnest in July 2020. They raised concerns about meat packers in Germany, the U.S. and Brazil. Shrimp from several Ecuadoran exporters was suspended after finding traces of covid virus inside shipping containers and on packages. Rejections of a few other seafood and meat products were reported by Tianjin and Dalian ports. Some soybean exporters said their Chinese customers had requested guarantees that shipments were covid-free. 

New media reports of covid-positive food tests came in bunches during November and December 2020 after the State Council issued an order to set up the national imported food testing-tracking system.

In January 2021 Chinese State TV announced that imported cherries tested positive
for covid-19 virus in Wuxi, a city in Jiangsu Province, causing prices to plummet.

After the system to test/sanitize/track/segregate imported food was in place, officials began sending mixed messages about the covid risk posed by food. A January 23, 2021 essay in Science and Technology Daily interviewed a Yangzhou University professor who claimed that, "generally speaking", the covid-19 virus can survive for a long time at low temperatures. The professor contradicted the earlier circular by asserting airborne virus, infected workers, or virus on equipment could contaminate the surface of food. The professor insisted that the uncertainty of transmission means that imported food must be regulated tightly. 

Two paragraphs later, the professor acknowledged that a positive nucleic acid test does not mean that the food will transmit the virus. The professor noted that few positive results had been obtained and explained that the positive tests may detect fragments of virus DNA that may no longer be alive nor infectious. He noted that a senior researcher at China's National Center for Food Safety Risk assessment said that no live virus has been isolated or cultured from positive samples taken from food surfaces. Twelve paragraphs into the article, the professor concludes there is no reason to avoid cold chain food as long as it has been tested and sanitized.

Mixed messages in numerous articles in Chinese news media over the past year have sought to head off consumer panic while insisting that imported food is risky. For example, an article from Huizhou Daily this month quoted the deputy director of China's Center for Disease Control who said that a positive nucleic acid test of imported food just means that it was once contaminated and not necessarily infectious now. The expert said that amount of virus detected on imported food or packaging is too low to be transmissible to consumers. These articles often include exhortations not to believe or spread rumors. These articles follow up these assurances with stern warnings to wear disposable gloves when handling imported foods, not to touch one's mouth, nose or eyes when eating imported fruit, to wash hands and utensils after handling imported food, and to disinfect packaging and use protection when handling food purchased by overseas shoppers or agents. 

In February 2021, China's customs administration reported that it had tested 1.49 million samples of imported cold chain foods, of which 79 had tested positive for the covid-19 virus (a 0.0053 percent positivity rate). No updated national testing numbers have been reported. This month Shanghai's port claimed it has inspected 700-800 trucks and containers per day and tested 1.52 million samples of imported food since it set up its imported food testing and tracking system in November 2020.

Chinese officials claim they can focus these testing and control measures on imports because no domestic food has tested positive for covid. But it's not surprising no positive results were obtained since domestic food is never tested; if you test enough samples of anything, you're bound to turn up some positives. Their claim is also debunked by reports in news media during 2020 that chicken from three processing plants in Anhui and Heilongjiang Provinces was found to be covid-positive. The source of contamination was never discovered--all follow-up testing was negative.

The most numerous border rejections appear to have been at border crossing points from Vietnam, Myanmar, and Thailand to China. In 2021, shipments were suspended for bananas from Myanmar and long'ans from Thailand. In December dragon fruit from Vietnam was suspended for a month following three positive tests, with 5000 trucks reportedly queued at the border. Border crossings from Myanmar were closed for trade of all products except sugar, rubber and rice for months due to covid concerns. 

Trucks waiting at the Chinese border. Source: 生鲜传奇.

Hundreds of trucks loaded with dragon fruit, durians, jackfruit, mangos, long'ans, and bananas found themselves stranded with merchants having little choice but to dump rotting fruit on the side of the road or sell it at a steep discount. Reports said roads in Myanmar were littered with boxes of rotten bananas dumped by stranded truckers. When the crossings are open, trucks move through at a snail's pace, slowed by the time-consuming testing and disinfection procedures. 

Despite the strict border measures, most reports of imported food contamination come from small cities in China's hinterland for fruit, seafood, and meat that had entered the country and traveled through one or two intermediate markets or warehouses before testing positive. Many of them reported "weak positives", and follow-up testing of additional samples, workers, storage areas and equipment always are negative.

In the latest example this month, several third-tier cities in Zhejiang and a county on the outskirts of Hangzhou reported positive covid-19 results for Vietnamese dragon fruit. Earlier this month, a county in Guizhou Province hundreds of miles from Thailand discovered contaminated Thai long'an fruit had been sold locally. A notice called on local consumers to report to authorities if they had purchased long'ans from the fruit stand in front of the hospital, from a 55-year-old lady with short hair selling fruit from a hand cart, or a certain stall in the local market.

In one peculiar September 2021 case, kiwi fruit from New Zealand was reported to be covid-positive in Nantong City, Jiangsu Province, two other small cities, and at an intermediate market in Hefei, Anhui. The kiwi shipments had passed testing at Shanghai's port, and exporters in New Zealand insisted the fruit had tested negative before they shipped it.  

China's elaborate measures to regulate imported food are not a simple protectionist trade barrier. While it has functioned as such--farmers harvesting fruit in Southeast Asia have seen prices plummet while prices have soared on the Chinese side of the border--this doesn't seem to be the main motivation.

A commentary released by a supermarket chain, "Is this the worst year for Southeast Asian fruit?" incisively explained the impact from the perspective of China's private sector. Referring to a surge in Chinese fruit prices due to plummeting shipments from Southeast Asia, the commentator disagreed with colleagues who suggested closing the border permanently in order to boost prices for Chinese farmers. He argued that protectionist measures are short-sighted because they would prompt other countries to retaliate with barriers to China's industrial exports. He also observed that competition had forced China's fruit industry to work hard and innovate, creating new varieties,  marketing channels, and brands. This brought great benefit to consumers, the commentator argued. 

A food safety regulator quoted by Science and Technology Daily acknowledged that China relies on imported food, and suggested that shutting down food imports would be like a person giving up eating because he's afraid of the danger of choking on his food.

The main impact of the imported food controls is to catapult China into its long-sought role as a country that can dictate the rules and practices in international trade--what Chinese officials call 话语权 (literally translated as "right to speak"). After years of being badgered to meet Japanese, U.S. and European  food safety standards, China now has an excuse to demand that exporters comply with its endless requirements for inspections, certifications, registrations, documents, "closed loop" pipeline-type traceable marketing channels, and to insert its surveillance cameras in foreign processing plants. 

Science and Technology Daily emphasized that China's customs authority had "strengthened control at the source" for imported food by "moving the gate forward" to carry out remote video camera inspection of foreign processing plants, suspending products and companies, and strengthening inspections at point of entry, "resolutely refusing to allow poison to penetrate the border."

In the same vein, last year China Customs reported that imports had been suspended from 129 companies in 21 countries, and another 110 companies had voluntarily suspended shipments to China. Customs cited Xi Jinping's "important directives" to strengthen control of imported cold chain foods at the source. Customs said it held video meetings and conducted spot checks of 199 food exporters in 55 countries to urge foreign officials and companies to fulfill their responsibilities. 

As the world's biggest food importer, when Chinese regulators say "jump", officials and companies around the world increasingly respond with "How high?" With a few exceptions, China's food imports are booming despite the elaborate requirements, so there aren't many public complaints. Many of the affected exporters, including Ecuadorian shrimp merchants, Chilean cherry cooperatives and fruit growers all over Southeast Asia have ramped up production to export to China. Even meat packers in the U.S. and Germany accepted tips from Chinese regulators on how to reorganize their plants to minimize covid contamination. Ecuador's shrimp exports rebounded in 2021. Chile expects another big year for cherry exports to China, although one Chilean official remarked that the country is looking to diversify its cherry export markets.

China's agricultural prices: -4.2% with hogs, +8.8% without them

How is farm price inflation affecting China? Dimsums blog calculated price changes from major commodity prices collected over the past two years from the National Bureau of Statistics raw material price reports and Ministry of Agriculture and Rural Affairs to assess the overall picture--which is quite cloudy.

A number of agricultural commodities in China posted double-digit price increases in 2021. However, the average 42-percent in hog prices swamped everything else. The figure below shows that cotton prices had the strongest increase, a 38-percent rise from 2020. Eggs, corn, soybean meal, domestic soybeans, and raw milk prices were up by 13 to 30 percent. Wheat, mutton, and beef prices posted single-digit increases. Rice prices have been falling due to weak downstream demand, with many provinces launching minimum price purchases to put a floor under prices following the 2021 harvest. Chicken and peanut prices were down 2% and 5%, respectively. 

An overall price index (weighted by value of these commodities' output) comes out to an average -4.2% price change in 2021. Hogs had an outsized influence on the index due to the huge value of their output. Recalculating the index excluding hog prices yields an 8.8% weighted average price increase. 

Annual average prices calculated from weekly data on raw material purchase prices from China National Bureau of Statistics and livestock wholesale market prices from Ministry of Agriculture and Rural Affairs. Weighted average calculated using 2020 output value of each commodity as weights. 

The pace of growth in prices varied over the course of the year. Cotton prices staged a comeback from their depressed 2020 pandemic level as export orders from the United States and other countries roared back. A cotton market report said a ramp-up of excess cotton ginning capacity in the Xinjiang region led to a bidding war for cotton. Corn prices dipped in 2021 after climbing 60 percent in 2020. December 2021 corn prices were only about 2 percent higher than their year-earlier level. On the other hand, Chinese wheat prices have been on the rise since the procurement season ended in September--last summer's heavy rains and flooding may have impacted the supply of milling-quality wheat more than indicated by record-high production data. December 2021 wheat prices were up 15 percent from a year earlier. Hog prices peaked in January, and were down 60 percent at their low point in October. Hog prices in December 2021 were down 51 percent from a year earlier.

China National Bureau of Statistics raw material purchase prices indexed to their January 2020 values.

Putting recent price changes in context shows that beef and lamb prices have been generally on the rise since 2012. A new burst of beef and lamb price growth came with the onset of China's pork shortage in 2019. The spike in pork prices that lasted from October 2019 to January 2021 was far bigger than previous gyrations, but it looks modest in comparison with the rise in China's beef and mutton prices. Chicken prices surged during the onset of the pork shortage, but the 2019 chicken price spike was a blip compared with pork, beef and mutton prices, and it quickly dissipated.

China Ministry of Agriculture wholesale market prices.

Feed prices reported by the agriculture ministry show that pork and poultry producers face sharply higher feed costs after several years of depressed corn prices during 2016-19. Corn prices in China are now higher than they were in 2012-14, but soybean meal prices are not yet back to their peak values in 2007 and 2012. Still, swine and poultry farmers are now getting about the same prices for their animals they got in 2016-18 but their feed prices are about 15 percent higher than back then.

China Ministry of Agriculture wholesale market prices.

Energy prices hit their peak in October 2021 and weakened during November-December as the Chinese economy lost steam. 

China National Bureau of Statistics raw material purchase prices indexed to their January 2020 values.

Chinese officials are worried that the rise in farm input prices will eat up farmers' profit margins and sow havoc in the countryside. The increase in fertilizer, fuel and pesticide prices during spring planting in 2021 so concerned officials that they gave out an ad hoc "one-time subsidy" of about $3 billion to compensate farmers for the rise in costs. Prices went up even more in the second half of 2021 and look like they will be high again in the upcoming spring planting season. 

China National Bureau of Statistics raw material purchase prices indexed to their January 2020 values.

No Growth in China's Livestock 5 Year Plan

 The 5-year plan for China's livestock dials down expectations for the country's meat production prospects. While the plan acknowledges that China's consumers are demanding more and higher quality meat, the plan sets modest production goals. It focuses on scaling-up farms, becoming self-sufficient in producing breeding stock, stabilizing supply, disease prevention, reducing the industry's environmental footprint, filling a shortfall in fodder for ruminants, and creating farm-industry links. 

The plan released by China's agriculture ministry in December 2021 set an 89-million-metric-ton target for meat production in 2025. That's an increase from the 76.4 mmt reported in 2020, but it's only fractionally higher than China's peak meat output in 2014. The 2020-25 increase represents mainly a recovery of swine production from its disease-impacted dip in 2019-20. IF these numbers are correct, China will have had basically no net growth in meat output for a decade if it hits the 2025 target.

Data from China National Bureau of Statistics and 2021-15 five-year plan target. 

The plan's preamble cites difficulty increasing production by relying on domestic resources, and frets about big uncertainty created by reliance on imports to fill domestic shortfalls in the meat industry. The plan worries about supplies of corn and other feed grains; reliance on imports for soybeans and alfalfa; and difficulties maintaining hog, cattle and sheep inventories at a high level due to pressure from covid-19, African swine fever and other animal diseases. The plan's authors raise concerns about lackadaisical attitudes toward ensuring livestock supplies in "some regions", "seriously weak" grass roots disease prevention, insufficient biosecurity, rising beef and mutton prices, tighter resource and environmental constraints, shortages of land for building farms and pasture, insufficient utilization of manure, and market risks from cyclical fluctuations and reliance on constant infusions of breeding stock from abroad. 

The plan calls for reliance on innovation, market forces, improvement in disease prevention, and "green" development as drivers. The featured objectives are increases in the proportion of output from scaled-up farms (from 67.5% to 78% during 2021-25), increased mechanization, manure utilization, and greater self-sufficiency in core breeding resources. Targets for output are only marginally higher than their 2020 values. The plan reiterates self-sufficiency rates set by the State Council in 2020: pork 95%; beef and mutton 85%; milk 70%; poultry and eggs 100%. 

China's agriculture ministry has pared back its expectations for livestock production as problems multiplied. Back in 2015 China's pork production was on the upswing, and the ministry's first set of future projections issued that year had pork output rising to over 65 mmt by 2024. Actual production went down in 2015 and 2016. A hog industry 5-year plan for 2016-2020 set a more modest target of 57.6 mmt for 2020. Then pork output plunged to 41 mmt in 2020 due to the African swine fever epidemic. Projections released in April 2021 anticipated that pork output will recover to 54 mmt in 2022 and eventually reach 60 mmt in 2030. The new 5-year plan ratchets down the target to achieve "stable" pork production of 55 mmt.

Projections by China Ministry of Agriculture and Rural Affairs and 5-year plans issued in 2016 and 2021.

Beef output has also severely underperformed compared with projections. China's 2015 projections extrapolated the rising trend in beef output shown in official data at the time, with beef projected to reach 8.3 mmt in 2024. A couple years later the Statistics Bureau decided that the beef output data were wrong. The Bureau revised its cattle numbers down after its agricultural census in 2016 discovered 20% fewer cattle than official data reported. Statisticians retroactively revised cattle data downward for 2007-16--and the rising trend in beef output evaporated. The ministry's latest projections show basically the same trend as six years earlier, but starting from a lower base. In 2021 the ministry expected that beef output would reach 8 mmt by 2030. The new plan's target for beef output is 6.8 mmt by 2025. 

Projections by China Ministry of Agriculture and Rural Affairs and 5-year plan issued in 2021.

Correspondingly, China has had to ratchet up its expectations for meat imports. China customs data show that 8.7 mmt of meat was imported in the first 11 months of 2021. That was down from 8.9 mmt during the same period of 2020, but still an unimaginably large number just a few years ago.

In 2015, China's ag ministry thought pork imports would grow to 1 mmt by 2024, but it only took a year for imports to hit that level, and they spiked to 2 mmt in 2016. When African swine fever hit, the ministry anticipated a modest spike in imports to 2.8 mmt in 2020, then gradually falling back to 1 mmt by 2029. Imports actually rose to 4.4 mmt in 2020. Last year the ministry projected a decline in pork imports to 1 mmt by 2030. The 95% self-sufficiency rate for production target of 55 mmt in the new plan implies a ceiling on pork imports of 2.75 mmt.

Projections by China Ministry of Agriculture and Rural Affairs and 5-year plan issued in 2021.

Beef imports have completely outstripped China's projections. In 2015, the ag ministry projected a gradual rise in beef imports to 500,000 metric tons by 2024. Actual imports surpassed that volume the next year. In 2020 a slightly faster rise in beef imports to 2 mmt by 2029 was projected, then another modest rise at a higher level was projected last year. Actual beef imports reached 2.8 mmt in 2021. The 85% self-sufficiency rate for the 6.8-mmt beef production target implies imports of just over 1 mmt, another number that seems unrealistically low.

Projections by China Ministry of Agriculture and Rural Affairs .

Beef cattle and sheep were singled out for attention in a 5-year action plan ordered up by last year's "number one document." The plan included support for scaled-up farms and breeders, links between farmers and companies, plans to increase production of corn silage, alfalfa, oats, ryegrass, and leaves from hybrid mulberry trees, and initiatives to graze cattle on mountainsides in southern China and transform production methods in grassland regions. 

China's five-year plan has most of the "right" things, but most of them are ideas from past plans that didn't work. 

• A huge "straw for beef" campaign in the 1990s tried to raise cattle on crop stalks. The latest plan calls for stockpiling 55 million tons of corn stalks for silage to feed cattle.
• Forty years ago Chairman Mao ordered communes to raise more pigs by feeding them mulberry leaves. 
• The directive to improve veterinary services is not new; 10 years ago there was a push to force provinces to budget money for veterinarians and force them to pass exams. 
• The African swine fever epidemic was not unexpected; the plan for the hog industry issued in 2016 warned about the threat of ASF yet the industry was woefully unprepared when the disease showed up two years later. 
• The new plan says the "market basket system" for supplying meat, vegetables, etc. to cities is not being implemented adequately, yet it has been in place for 40-plus years. 
• The 2006-10 plan set up an elaborate system to stabilize the hog market using frozen pork buffer stock interventions triggered by the hog-corn price ratio, a dozen "early warning" indicators, and sow subsidies; all of that is forgotten and the new plan again resolves to stabilize the industry. 
• The 2006 plan called for controlling pollution from animal manure and a huge campaign to shut polluting livestock farms; now the new plan is all about "green" development. 
• China has had demonstration programs to collect manure and generate methane gas since the 1970s, but agricultural officials are still moaning about failure to utilize manure. 

The best thing about the plan is that officials seem to have come to grips with the reality that China cannot keep expanding livestock production forever in a country that is short of land and clean water.