China's grain data for 2024: output 'at a new level'

China's grain output "reached a new level" in 2024 as it surpassed 700 mmt for the first time, according to a Chinese official explaining this year's grain data. Production rose 1.3 percent to 706.5 million metric tons (mmt) in 2024. The area planted in grain crops increased by 0.3% and average yield increased 1.3 percent in 2024 according to data released December 13. 

Corn was the driver of China's growth in grain output as it has been for many years. According to the Statistics Bureau's communique on 2024 grain output, corn production reached a record 294.92 mmt in 2024, well above the output of rice (207.54 mmt) and wheat (140.1 mmt). Corn output rose 6.1 mmt this year (up 2.1 percent) and wheat output rose 3.5 mmt, as the two crops accounted for most of the 11.1-mmt increase in grain output. Rice output rose 900,000 metric tons and soybean output declined 200,000 metric tons. Production of early-season rice fell 600,000 metric tons, probably due to summer floods in southern provinces.

Source: China National Bureau of Statistics.

Corn also accounted for nearly all of the increase in area planted in grain during 2024, with an increase of 521,800 hectares (+1.2 percent). Rice area rose 57,800 hectares, including a 21,700-hectare increase in early rice. Wheat area fell 39,800 hectares. Soybean plantings fell 140,700 hectares as Xi Jinping's campaign to boost soybean self-sufficiency seems to have faltered. 

Source: China's National Bureau of Statistics.

Wheat accounted for most of the improvement in grain yield as growing conditions were favorable for the winter wheat crop. Wheat yield increased by 158.6 kg-per-hectare (+2.7%). Early rice was the only grain crop with a decline in yield. 

Source: China National Bureau of Statistics.

Corn's dominance of grain output growth continues a long-term trend. Corn output grew at a frantic pace from 2004 until a massive corn glut was built up during 2012-15. A "supply side structural adjustment" during 2016-20 to alleviate the glut interrupted the growth. Corn output growth was resumed since 2020. Rice output seems to have plateaued and wheat is growing at a moderate pace. Soybean output is stuck around 20 mmt. 

Source: Data from China National Bureau of Statistics.

The National Bureau of Statistics official explained that this year's bumper harvest was due to officials preventing loss of arable land, averting impacts of natural disasters, and the central communist party leadership's support for grain output: raising the minimum prices for wheat and rice, paying grain producers an "arable land fertility protection" subsidy, corn, soybean and rice producer subsidies, improving a full-cost insurance and income protection insurance program, an agricultural input price stabilization program, "comprehensive land governance", and expansion of summer crop planting to maximize the potential area planted in grain. Based on the official's explanation, the objective of the soybean producer subsidy seems to have quietly shifted from increasing soybean self-sufficiency to keeping soybean area planted stable at 10 million hectares or more. 

The official attributed good yields to good sunlight and moisture in grain-producing regions despite floods, droughts, and typhoons. He credited the "high standard field construction" program, and an action plan to raise yields through increased planting density, combining fertilizer application with irrigation, and a program that combines a growth-promoting spray with herbicide and pesticide applications. 

The official began his explanation by crediting Xi Jinping's guidance for record grain output and concluded by explaining the grain output figures support Xi's priorities. A shorter description of the grain data and the official's explanation were also featured on page 1 of the December 14 Peoples Daily. According to the Statistics Bureau official, China's record grain output contributes to national food security, global food security, stabilizes the world grain market, and lays a foundation for China's status as an agricultural power. Grain production advances rural revitalization, drives "high quality development" and puts economic recovery on a good trend, the official said. 

China's CPI hides big price drops for some items

 China's November Consumer Price Index was up 0.2 percent. The food component was up 0.9 percent, but that number hides a lot of big price declines for agricultural goods further up the supply chain. The table below compares year-on-year changes in select food categories from the November CPI report with year-on-year price changes calculated from several other November price data reports from China. 

For example, the CPI reported a 1.1 percent decline, but other data sources reported 18 and 19-percent declines for wheat, a 17 percent decline for flour, and price declines of as much as 4-to-6 percent for rice. 

Beef prices are down 13.5 percent in the CPI and down 18.3 percent in the Ministry of Agriculture's wholesale price report. Milk prices are down 1.4 percent from last year in the CPI, but raw milk is down 15.2 percent according to the agriculture ministry's wholesale price data.

Apples and potatoes are down about 10 percent from last year. 

The main components of animal feed were down by double-digits. Corn prices were down 18-to-21 percent and soybean meal was down 24-to-26 percent from a year ago. 

In contrast, pork prices are up about 14 percent from their depressed level of a year ago in the CPI and in wholesale price databases (but still below their level from November 2022) as many producers have cut back on production capacity after financial losses last year. With higher pork prices and lower feed prices many pig farms are seeing a reverse of last year's steep losses. 

Vegetables are another item with higher prices this year. The CPI vegetable component was up 10 percent from a year ago, probably reflecting the impact of summer flooding. According to MySteel agricultural price reports, garlic and chili peppers are up more than 20 percent and ginger is up 16.5 percent from last year. 

The declines in many prices reflect weak demand, the influence of sinking global prices for many agricultural commodities, and a deflating economy. The declines are consistent with anecdotal reports from China of food bargain-hunting, popular cut-price buffets, and more cooking at home to save money.

China's relentless soybean crushing build-out drives imports

China keeps building more soybean processing capacity, driving its demand for soybeans ever higher and undermining Xi Jinping's dream of reducing dependence on imported soybeans. 

An article issued by Shanghai-based Mysteel agricultural commodities last month reported that China's soybean crushing capacity increased from 120 million metric tons (mmt) to 140 mmt over the past 10 years. 

A similar article chronicling China's soybean crushing expansion that appeared in 2022 said 10 to 15 soybean crushing facilities with 60,000 metric tons per day were planned for completion between 2022 and 2025. The ones completed have contributed to the expansion reported above. With more scheduled for completion, the Mysteel article predicts that capacity will grow further in the next 2 years. 

The massive build-out of capacity--from 10 mmt in 2000 to 140 mmt now--powered China's emergence as the world's dominant soybean consumer. 

USDA's PS&D estimates show that China was already the world's biggest soybean crusher 10 years ago (in market year 2014/15). That year China consumed 74.5 million metric tons,46-percent more than the amount crushed by the United States. For 2024/25 USDA estimates China will crush 103 million metric tons, 57 percent more than the U.S. China's 28.5-million-metric-ton increase over the past decade is close to the increase in crush by the United States and Brazil combined. The combined increase in crush over 10 years by the other 7 countries in the top 10 was less than 10 mmt. 

If the Mysteel capacity numbers are correct, China was using only 62 percent of its crushing capacity in 2014/15, yet crushers felt the need to add 20 mmt of new capacity over 10 years. The numbers imply that China will utilize 74 percent of its crushing capacity this year. 

The Mysteel article reports capacity utilization for China's soybean crushing industry fluctuating between 55% and 70%, and just 42% for the first 10 months of 2024. The Mysteel author describes the industry as suffering from excess capacity. (The lower utilization is only partly explained by a divergence between USDA and official Chinese crush estimates: China's Ministry of Agriculture's CASDE has a 17.6-mmt increase in soybean crush over 10 years from 77.3 mmt to 94.9 mmt in 2024/25.)

A separate article posted on multiple sites in 2022 reported that crush capacity was 174 mmt with a utilization of 54%. That article described the industry as suffering from serious excess capacity.

China has hundreds of crushing facilities built mainly at ports and rivers for cheap and easy access to imported soybeans. According to last month's Mysteel article the regional layout has been stable with 85% of capacity in coastal provinces ranging from the Bohai Gulf region in the north to the southern coast. The largest concentration of soybean crushing facilities are in the provinces of Shandong, Jiangsu, and Guangdong. Only 15% of capacity is inland, along the Yangtze River and in big pig-producing southwestern provinces of Sichuan and Yunnan.

Created from data in Mysteel agricultural commodities article.

The Mysteel article says it excludes capacity that has been idled for a long time. It appears to also exclude crushing capacity in Heilongjiang Province. The 2022 article reported that most of the Heilongjiang crushing capacity--meant for processing domestic soybeans--had been idled or switched to manufacture soy-based food products like tofu. The 2022 article implied that only 1 mmt of domestic soybeans were crushed to produce oil and soybean meal during 2021/22. 

Control of China's crushing capacity is almost equally split among Chinese state-owned companies (38% of capacity), Chinese private companies (32%) and multinational companies (30%). The top companies have all been adding crushing capacity for imported soybeans aggressively, but state-owned companies (SOEs) have led the way. 

The leading share of crushing capacity held by state-owned companies (SOEs) dates back to a 2008 campaign to dilute multinationals' share of soybean crushing by bankrolling SOEs COFCO and Jiusan to acquire other companies--smaller private crushers, Singapore's Noble Agri, and another SOE called Chinatex--and to build more than 10 new crushing facilities at coastal and river ports. At the end of 2021 there were 41 SOE crushing facilities, 41 private crushers, and 33 foreign-invested crushing facilities. 

A posting on Baidu.com said COFCO had 20% of capacity, while SOEs Sinograin and Jiusan each had 9% of crushing capacity. Singapore-based Willmar was the largest multinational with 11% of capacity.

The bottom line is that different tentacles of the Chinese State are working at cross-purposes in the soybean sector. 

Supreme leader Xi Jinping has decreed an increase in soybean self-sufficiency by ordering agricultural officials to subsidize and expand domestic soybean output and to convince feed mills to substitute alternative feeds for soybean meal. 

Meanwhile, state-owned companies continue building crushing capacity for imported soybeans. And imported soybeans have been getting cheaper, keeping the facilities among the few profitable businesses in China this year. The need for an ever-increasing flow of imported soybeans to utilize the capacity, cover the fixed costs and pay debts incurred to build the facilities ultimately undermines Xi's goal of reducing reliance on imported soybeans. 

Milk Glut in China Since 2021

The predicament facing China's dairy and beef industries was featured at an October 25 State Council press conference in Beijing where a Ministry of Agriculture official said his department is closely watching the "complex and severe" situation facing the beef and dairy industries as prices fall and farms run into financial difficulties. 

A Q3 2024 report on livestock production costs in Shandong Province found that dairy producers are losing 15,000 yuan on each cow. Milk is bringing in less income--raw milk prices are down 15.65-percent year-on-year--and plummeting beef prices mean that farmers get 23-to-33-percent less for culled cows compared with last year. ...And last year was also bad.

Milk prices remain under pressure with supply exceeding demand and dairy companies looking to offload excess inventory. Fluid milk sales were down 8.6 percent in 2022 and 2.15 percent in 2023. According to the Shandong report, milk consumption is still declining this year and will remain under pressure in Q4. A China Agriculture University professor ascertained that the supply-demand imbalance is more severe than last year. He estimates a 3.6-percent decline in China's dairy herd this year. The National Bureau of Statistics (NBS) reported a 0.1-percent decrease in dairy output during the first 3 quarters of 2024, but Shandong Provincial officials estimated their province's milk production during Q3 was up 6 percent year-on-year.

Chinese officials began pushing dairy production with a "Dairy Industry Revitalization" launched by the State Council in 2018. NBS data suggest a growing milk glut in China that corresponds to the years after the launch of the dairy revitalization plan. China's dairy production growth has clearly outpaced consumption between 2019 and 2023. Milk output divided by population grew from 23 kg to 30 kg while per-capita dairy consumption reported by NBS's household survey grew by less than 1 kg over those years. 

Per-capita production = production / population
Per-capita consumption from household survey.
Source: National Bureau of Statistics, China Statistical Yearbook.

In a September article, China Youth Daily fretted that dairy consumption is still low--just 37 percent of the world average--and well below the 300-to-500g daily consumption recommended by Chinese nutrition guidelines. The article called for increases in consumption to utilize excess production capacity and to alleviate severe losses of dairy companies. 

The article cited official data showing that China's milk output rose 6.7 percent in 2023 to a record high, but consumption dropped by 1.6 percent. Agriculture Ministry researchers estimated that the income elasticity for milk is 1.74, so consumers treat it like a luxury item they consume when they can afford to do so. (...and presumably they stop buying milk when their incomes fall.) Researchers also found that Chinese consumers think milk prices are too high and prefer bargain-priced milk products over high-quality products. 

After years of rapid growth China's milk imports peaked in 2021 and dropped 38 percent by 2023 to a level about the same as in 2019. As this blog noted in a September post imports of infant formula peaked in 2019 and subsequently dropped 33 percent. Chinese customs data for January-October 2024 show that milk powder imports are down 24 percent so far this year. 

Source: China customs data.

An article released in conjunction with China's international imported product expo earlier this month described "fierce market competition," declining imports over the past two years, falling prices and shrinking profits for international dairy brands in the Chinese market. The expo was attended by 36 brave companies from 12 countries, including Nestle, Mead Johnson, Alafoz, and Fonterra. With prices of imported dairy products falling 15 to 18 percent this year, importers of dairy products are cutting costs, developing new products and market segments, the article said. The article reported impacts on financial results of several multinational companies stemming from the sinking Chinese market. 

A Chinese Government analyst recommended giving out coupons to boost consumption, launching a new student milk program, publicizing nutritional benefits of milk, and promoting milk in military and office canteens. 

At the October State Council news conference a Vice Minister of Agriculture said his ministry will guide farmers to "scientifically adjust herd size, order local officials to expedite distribution of subsidies for high quality heifers, continue a program to convert fields from grain to forage crops, subsidize alfalfa production, help farmers store fodder, pressure financial organizations to lend to dairy and beef farmers, and strengthen technical guidance.

China's Hog Farms Move South

China's pig companies have been withdrawing from northern China and shifting production to southern provinces, according to a recent feed information net article. Consequently, mature hogs are being shipped from southern farms to northern provinces for slaughter. 

The article reported that Tianbang company cleared out some of its farms in the northern province of Shandong and northern parts of Anhui and Jiangsu Provinces due to disease epidemics during 2023 and 2024 that reduced productivity and raised costs. New Hope Group had focused its investment in northern provinces Shandong and Hebei during the 2021 recovery from the major African swine fever epidemic. However, New Hope also began winding down production capacity in the region as they also encountered new ASF outbreaks and faced competition from other companies that invested in northern provinces. Zhengbang Technology--successfully reorganized under bankruptcy protection--also withdrew from the north. Aonong Biological has announced its intention to leave the Shandong market as well. 

Companies are shifting production capacity to southern provinces like Guangdong, Guangxi, Jiangxi, Hubei, Hunan, and Fujian. Southwestern provinces such as Sichuan and Yunnan are also seeing many investments in large-scale pig farms. According to the article, southern regions have advantages in climate, environment and other aspects. Pigs are being shipped to Liaoning, Shandong, and Henan Provinces for slaughter and secondary fattening. Shandong (in the north) has now surpassed Guangdong (in the south) as the province with the largest net inflow of pigs. Yunnan, Guangxi, and Hubei are the top provinces in outflows of pigs to other provinces. 

This "southern pigs to the north" geographic transportation pattern reverses the Chinese agriculture ministry's now-forgotten plan to shift hog production northward to curb manure pollution of the many rivers, streams and lakes in the southern region. In 2015 the Ministry of Agriculture and Rural Affairs declared that hog farm production was beyond its carrying capacity in the Pearl River watershed (including Guangdong) and the Yangtze River delta and at carrying capacity around the Dujiangkou reservoir (the starting point of the central south-to-north water transfer channel) in northern Hubei Province. The Ministry judged that northern regions had some room for development. 

The growing shipment of hogs across the country appears inconsistent with a second plan to create compartmentalized hog production regions to reduce disease transmission during the ASF epidemic recovery.

The southern shift of pig fattening is also favorable for feed imports. Southern and Southwestern Provinces are far from China's corn- and soybean-producing regions in the northeast.

Chinese farmers "break the law every day"

A Chinese video posted on Youtube in September voices the frustration of China's underclass with the accumulation of unseen regulations that effectively make every farmer in China a lawbreaker. 

Man dressed as a farmer complains that he breaks the law every day just by being a farmer. Video posted on Youtube.

Here's a rough translation of the gentleman's 1-minute discourse:

"I thought that as long as I didn’t steal, didn’t worship foreigners, and didn’t sell out the country, I was a good citizen. But as a farmer, I break the law every day."

"Burning straw--illegal."

"If I cut down a tree I planted myself--illegal."

"Selling my melons on the roadside--illegal because they haven't been tested."

"If I kill a pig and sell some of the meat to relatives and friends--illegal."

"Save seed from my harvested grain to plant next year--illegal."

"It's illegal to build a pig sty or a toilet."

"Get water from the well outside my door--illegal."

"It's illegal to kill a wild boar that comes down from the mountain to eat my crops."

"Setting off fireworks to celebrate the new year--illegal."

"And all kinds of illegal activities that I have never seen before."

"They are all experts whom we all look up to, making various regulations tailored for us farmers that we have never seen before. As long as I' am alive I'll be breaking the law."

Based on his diction and appearance the farmer speaking in the video may not be an actual Chinese peasant from Chongqing as stated. A similar list of 10 things that are illegal for farmers was posted last December. Both posts are on overseas anti-communist web sites, but the rules they list are real. 

The communist party's "number 1 document" this year had 7850 characters instructing officials to carry out dozens of rural initiatives and programs. It called for integrating urban and rural development [eliminate distinctions between cities and countryside], "optimizing the layout of villages" [razing small, backward villages and moving the population into large modern ones], and strengthening rural fertility support and infant care services [a few years ago rural people were threatened with punishment for having too many kids].

The video does reflect a fundamental clash between the Chinese rulers' attempts to regulate and standardize everything in the countryside versus the Chinese peasantry's longstanding practical approach to life signified by "The hills are high and the emperor is far away." 

China's Soybean Revitalization Fizzles

As China's 2024 harvest for soybeans kicks off with prices plummeting it is clear that authorities in China are losing a years-long battle to reduce reliance on imported soybeans. 

China's Ministry of Agriculture and Rural Affairs' 2021-25 five-year plan set a target of boosting soybean production to 23 million metric tons (mmt) by 2025, a feat that officials predicted would raise China's soybean self-sufficiency by 6-to-7 points. However, the Ministry's October CASDE supply & demand estimates indicate that 2024 production reached only 20.45 mmt, slightly less than last year's output and 2.5 mmt short of the 2025 target. CASDE estimates this year's soybean area at 10.16 million hectares, also short of the 10.667 million hectare target for 2025.

CASDE estimates China's soybean imports in the 2024/25 marketing year at 94.6 mmt. Combined with the production estimate this implies a 17.8-percent self-sufficiency rate. That's higher than the 4 years only because CASDE has a low-ball estimate of imports. (CASDE has a history of underestimating imports: CASDE's forecast for 2023/24 soybean imports made a year ago was about 5-mmt under the actual number.)

Another MARA monthly agricultural market situation report said that Chinese soybean prices are weakening as newly harvested beans hit the market in northeastern China while output in the U.S. and Brazil puts downward pressure on international prices. The report noted that USDA estimates world soybean output in 2024/25 is up 8.7 percent year-on-year alongside record-high inventories. 

According to the report, 

• Domestic Chinese soybeans delivered to processors in Shandong Province averaged RMB 5,100 per metric ton, down 11.3 percent from a year earlier. 
• Imported soybeans C&F prices including duties averaged RMB 3,880 per metric ton, down 19.7 percent year-on-year.

Procurement prices compiled from China's National Administration of Food and Commodity Reserves indicate a steep drop in soybean prices in the first half of October 2024. The average soybean procurement price on October 23 (RMB 3835/mt) was 22 percent less than a year ago and 35 percent below the price in October 2022. 

Data from China National Administration of Food and Commodity Reserves.

China has wasted huge amounts of money and resources achieving a marginal increase in soybean output that has plummeted in actual value. 

The 2019 "number one document" declared a soybean revitalization plan, followed by a Ministry of Agriculture and Rural Affairs plan that called for setting soybean producer subsidies to incentivize production, disseminating high-yielding varieties, building high-standard fields, and forging close links between processors and growers.

The communist party's 2022 "number one document" instructed officials to implement the project to raise soybean and oilseed production capacity by offering soybean producer subsidies, promoting corn-soybean intercropping, switching from rice to soybeans in parts of Heilongjiang Province, and planting soybeans on saline soil. 

In 2023, Xi Jinping issued special instructions demanding an increase in soybean output with "measurable results." The 2023 "number one document" called for intensified efforts to expand soybean production. Four government departments offered a "combination punch" policy package of farm subsidies, transfer payments to major soybean producing counties, construction of soybean industry parks, soybean financing and credit, pilot insurance covering the full cost of production, procurement for reserves, to "send a clear signal" motivating farmers to plant soybeans. 

Earlier this year Heilongjiang Province said its 2024 soybean subsidy would be RMB 350 per mu. Subsidies in Jilin Province were said to be even higher: between 460 and 550 yuan per mu in various localities, while subsidies in Inner Mongolia were reported to be 314 to 340 yuan per mu.

At the October 16 procurement price 3896 yuan/metric ton with a yield of 130 kg per mu, the subsidy for Heilongjiang soybean farmers would comprise about 40 percent of their revenue.

In 2020 Heilongjiang also introduced a subsidy for soybean processing enterprises to reverse declining output and idle production capacity. The subsidy was given for processing soybeans produced in Heilongjiang or for soybeans imported from Russia (700,000-800,000 mt of soybeans are imported annually), subsidized working capital loans, capital investments, and funds for local governments. 

The provincial grain bureau's investigation to justify the subsidy found that Heilongjiang enterprises crushed 1.2 million metric tons of soybeans for oil and processed 1.75 mmt for tofu and other food products in 2019. The total of 2.95 mmt soybeans processed in Heilongjiang in 2019 was just 38 percent of the 7.8 mmt produced in the province that year. 

This year Chinese propagandists have been trying to paint a picture of optimism for China's soybean industry, a sure sign that things are not going well. 

On October 17 Economic Daily gushed over the "bright prospects" of the market for Chinese soybeans, citing growing demand for soy-based foods as people seek healthier diets, broadening the market space for development of China's soybean industry chain. However, MARA's monthly market situation report said the average price for food-grade soybeans in Heilongjiang Province dropped 9 percent year-on-year in September 2024. 

On October 25 Farmers Daily reported on strategies to expand China's soybean industry despite facing competition from low-priced imported soybeans: a mechanized 400-hectare operation that farms land on behalf of dozens of villagers, massive State Farms, aggressive procurement by government reserves with financial backing from the government's policy bank, a pest- and disease-resistant strain developed by the seed-breeding arm of Heilongjiang's State Farm system.

 

Suddenly Xi Wants American Friendship

Xi Jinping really wants to be friends with Americans. Don't let the relentless hacking, unprecedented espionage, censoring of foreign news, election interference, planting of spies in politicians' offices, arrests of business consultants, and belligerent stunts in fighter jets fool you. Xi is a friendly guy!

Last week Chinese state news media featured Xi Jinping's "story of deepening friendship between the Chinese and American people. According to a "congratulatory letter" sent to the awards dinner of the National Committee on U.S.-China Relations, Chairman Xi wants "more exchanges, more communication, and steadily deepening mutual cooperation" between Chinese and American people. 

Xi's message to the dinner was received October 15. That was the same day the news media breathlessly covered the arrival of a new set of pandas at Washington DC's National Zoo--obviously meant to be part of the "friendship with America" blitz. This appears to be a course change after Xi recalled all but 2 pandas from America zoos last year in a fit of anger.

According to Chinese news media Xi has sent "warm and affectionate congratulatory letters to American people in all walks of life" since his visit to San Francisco in November 2023.  

However, Chinese State media had trouble coming up with any recent examples. It dug up decades-old obscure examples of Xi's friendships with Americans by highlighting visits with a trio of people linked to Xi's visit to Muscatine Iowa 39 years ago when he was a young county apparatchik. Xi praised the World War II-era Flying Tigers who defended the Republic of China from Japan 85 years ago. (China's English-language news media and the Chinese ambassador to the U.S. all promoted "the spirit of the flying tigers" last month). Also featured was the elderly wife of a deceased American professor who was somehow linked to youth exchanges. The article shamelessly exploited American children invited to visit China to be used as pawns in his propaganda game. 

On the other hand, it's not hard to find examples of Xi making friends with America's enemies. 

In 2022, Xi declared a "friendship without limits" with Putin's Russia just before the invasion of Ukraine.

Xi overcame his distaste for Islam, beards and 7th-century lifestyles by making friends with the Taliban immediately after the American withdrawal from Afghanistan.

Xi, an avowed atheist, also found fellowship with Iran's President Raisi.

Last year, after the October 7 attack on Israel, Xi attempted to upstage the Americans by becoming a peacemaker in the Middle East. China has disappeared from the scene as the situation deteriorated.

Unfortunately, these friends are not going to bring investment to rescue China from its economic freefall. He needs Americans to fill empty office buildings in Shanghai and he needs their cash to recharge depleted bank reserves. Hence, Xi's new-found need for American friendship.

China's Infant Formula Market Shrinks as Births Decline

China's market for infant formula is shrinking along with the number of babies. According to China's National Bureau of Statistics, the number of births fell by half between 2016 and 2023, from 18.7 million to about 9 million. Customs data show that China's imports of infant formula (HS code 190110) peaked in 2019 and fell 33% by 2023. Imports for January-August 2024 are down another 20% from the same period in 2023.

Source: China National Bureau of Statistics and Customs Administration.

Many Chinese companies import milk powder in bulk to manufacture infant formula and all kinds of other milk products in China. Customs data show that imports of bulk milk powder peaked in 2021 and fell 40% by 2023. Bulk milk powder imports are also down 20% in January-August 2024 from a year earlier. 

A January 2023 article noting the decline in dairy imports quoted a food industry analyst who blamed China's sustained decline in births for a "crisis" in the industry. The analyst surmised that a decline in dairy imports is the inevitable result of the "loss of the demographic dividend." 

Perhaps it would be more apt to describe this as payment of a demographic debt. 

An August China Business Herald article pointed to double-digit declines in infant formula imports during the first half of 2024 as an indicator that China's milk powder business is becoming increasingly difficult. This article contrasted positive growth reported in financial reports of European dairy companies with the shrinking volume of China's infant formula imports. According to an industry analyst quoted by China Business Herald, the Chinese infant formula market is consolidating as leading foreign companies do well while medium and small companies--both domestic and foreign--are struggling. 

However, it will still be a crowded market for a while. Chinese authorities recently required infant formula manufacturers to pass a second round of registration audits to certify compliance with China's unique standards for infant formula. China Business Herald reported unofficial data showing that 409 infant formula products manufactured by 93 companies were registered by July. Twenty percent of the registered facilities were overseas. 

 

China's beef & dairy farmers running out of money

Last week's meeting of the standing committee of China's State Council called for relief policies to help beef and dairy farmers who are in financial straits. According to a report on the meeting cattle and sheep farms have seen shrinking profits due to falling prices and rising costs. The Ministry of Agriculture and Rural Affairs (MARA) has organized several meetings since August to address dairy and beef issues. An August 21 meeting concluded that the industry faces a dire situation with large losses for farmers and companies due to poor dairy and beef prices and pressure from imports. 

MARA data indicate that China's beef prices have been on a downward trend over the past two years. The average September 2024 price is down 23 percent since the decline began in January 2023. The current average beef price is about the same as in 2019.

Source: Wholesale price data compiled from China's Ministry of Agriculture and Rural Affairs.

China's milk prices have been on a similar downward trend. The average Chinese wholesale milk price in September is down 24 percent since early 2023. The current milk price is lower than it was 12 years ago.

Source: Wholesale price data compiled from China's Ministry of Agriculture and Rural Affairs.

According to a September 10 commentary in Economic Daily China's livestock industry has "oversupply troubles" that result in depressed prices and difficulties for many business entities. The commentator asserted that livestock producers should be advised to slow down their expansion of livestock production capacity--by advising them to cull old low-yielding cows, for example. Yet the commentator also worried that production capacity might decline as extended financial losses put farms out of business. To avoid this, he called for the government to intervene to prevent an excessive decline in capacity. 

Dairy and beef farms in China are apparently under severe financial pressure. The Economic Daily commentator and the State Council meeting both brought up shortages of working capital as key problems facing the industry. These farms rely on financing due to the fixed costs of sheds and barns, need for funds to buy feed and other inputs, and the long production cycle for beef cattle. The only concrete measures proposed in the State Council meeting were prodding banks to lend to cattle farms, accepting cattle as loan collateral, and subsidizing insurance for beef cattle. These recommendations presume that Chinese banks have plenty of money to lend, but the banks may have financial troubles of their own after the implosion of China's property sector.

Feed costs are the biggest problem, according to the Economic Daily commentator. "Not enough grass" constrains cattle and sheep farming competitiveness, as China supplies only 70% of forage needs for cattle and sheep, according to the commentator. He faults local officials for not allowing enough hay and forage crops to be planted because they "misunderstand" the demands of China's food security law which dictates that cropland should by planted in grain crops.

The Economic Daily commentator pointed to environmental protection conflicts. He thinks business entities will increase investment in manure treatment and utilization as fertilizer--again assuming they have the money to do so. He faults local officials for prohibiting livestock farming in their jurisdiction as an environmental protection measure (this seems inconsistent with his excess capacity story).

China's plummeting beef prices are out of step with international prices. U.S. beef prices have been on the rise. Brazilian prices dropped in 2022 and have been low and declining slightly during 2023-24. 

Sources: China Ministry of Agriculture and Rural Affairs; USDA/ERS; FAO.

Are imports to blame for China's excess supply? China's beef imports have risen 65% since 2019 despite the onset of the pandemic in 2020, COVID decontamination and segregation requirements for meat imports, and zero covid lockdowns during 2022. Imports were stable at a record level during 2023 despite the drop in beef prices that seems to indicate shrinking demand. 

Official Chinese data indicate that China's beef output has increased every year since 2016, a cumulative increase of 1.6 million metric tons (a 26% increase). USDA's PS&D dataset shows that China's imports grew 3.1 million metric tons during 2016-23--almost twice as much as the growth in China's output. 

Source: USDA Production, Supply & Distribution database.

China can't blame its oversupply of beef on the Americans or Australians, though. All of the growth in beef imports has come from Brazil and other South American sources which together supply about three-fourths of China's imported beef. 

China's official data also report increases in milk production every year since 2017, a cumulative increase of 38%. Imports of milk powder--China's predominant dairy import--have declined sharply since peaking in 2019. USDA's forecast for 2024 will be about half the 2019 peak volume. 

Source: USDA Production, Supply & Distribution database.

China's media manipulation in the open

In a visit to the offices of Farmers Daily, last week China's Agriculture Minister instructed the news media outlet to shape public opinion in order to promote the Chinese communist party's rural revitalization policies. His instructions reveal the game plan for China's use of journalism to manipulate public opinion and render its news outlets irrelevant to everyone except party officials. 

Agriculture Minister Han Jun instructed Farmers Daily staff to publicize the Party Central Committee's rural policies and to explain and preach (宣讲) General Secretary Xi Jinping's important discourses on rural issues. The paper must deepen its comprehensive and strict governance by the party and integrate political consciousness into all speaking and writing. Han reminded the staff that "it is necessary to carefully guide public opinion" on rural issues. 

China's Minister of Agriculture inspects Farmers Daily's use of new media
to issue communist party propaganda. Source: MARA Press Office.

Rural officials are Farmers Daily's main readers. Han pointed out that it is especially important that party cadres in the rural system need an accurate understanding and grasp of the party's "historic achievements." Han explained that cadres need to know the specific requirements, bottom lines and "red lines" of rural policy so they can implement and spread the policies.

Reporting should manipulate events to "tell the story of rural revitalization in the new era," Han told Farmers Daily staff. In other words, they should show that the party's rural policies are succeeding. When investigating "hot events" they should do a good job in refuting "rumors." "Correct orientation and content are king," Han said.

Han told the journalists they should stay in touch with farmers by talking with them and eating with them so they don't become too distant from their interests. They should give farmers a voice and be aware of public concerns. 

Today's Farmers Daily web site is entirely filled with propaganda as instructed by the minister. It features a banner on Xi Jinping's important discourse on rural work, another on studying Xi Jinping's thought on Socialism with Chinese Characteristics for a New Era, and 4 more Xi articles. The news feed includes Xi's "big food concept" of diversifying food sources, China on the brink of becoming an "agricultural power", Xi's inspection of Lanzhou City, a beautiful woman teaching children to make mooncakes, the bumper corn harvest in a county of Henan Province, rural industry in Xinjiang, the achievements of building 10 billion mu of high-standard fields, etc. The Statistics Bureau says the fall harvest is normal, pig farms are returning to profitability, and a good oilseed harvest is expected in Hebei Province.

An example of an article directed at local officials is "Why we need to establish a coordinated compensation mechanism between grain producing areas and grain consuming areas." No one else would be interested in reading this turgid article that quotes a central communist party decision and recites grain output and land statistics to explain why rich provinces need to pay poor provinces. The article's purpose is to prod officials in grain-consuming provinces to support the program. Another article warns local officials not to use public funds for banqueting during this week's moon festival by detailing 3 cases of officials in Yunnan Province who were arrested for "illegal eating and drinking."  

Typhoons in eastern China appear to be actual news of interest to farmers, but the article on this topic is buried in the web page and focuses on video conferences held by government departments and their deployment of personnel to prevent floods.

Even articles that appear to reveal scandals are carefully manipulated to show the communist party as problem solver while evil lawbreakers and corrupt local officials--usually in small obscure cities--are always the villains.

Last month "Egg World" released a report about antibiotic-laced eggs sold in Linhai City of Zhejiang Province that had residues of 4 antibiotics that were 40 times the allowable amount. Testing by market supervision authorities in Linhai in September 2023 discovered the "problem eggs," and authorities traced them back to a chicken farming cooperative in Liaoning Province who had supplied a dealer in Linhai. The eggs were accompanied by a fake testing report that declared them free of antibiotics. The agriculture ministry declared that testing did not comply with their standards. By July 11 people had been prosecuted, including egg farmers and dealers, according to the report.

The report on eggs did not mention that China's agriculture ministry has been trying to cut back on excessive antibiotic use in poultry and livestock for at least 7 years and banned use of antibiotics in feed 4 years ago. Nor did the report wonder if the Liaoning farms who sold eggs to Linhai--the two places are over 2000 km apart--might have supplied many other locations. Nor did they question whether other farms might also be abusing antibiotics. Indeed, the real purpose of the article may have been to "kill the chicken to scare the monkey" to send a message to local officials, farmers and egg dealers; the government has noticed that the bans on antibiotics are widely violated, local officials had better crack down on it, and there will be punishments for violators.

A July 2 report by The Beijing News (Xinjing Bao, run by the Beijing communist party's propaganda department), caused a stir when it reported that a tanker truck hauled petrochemicals across the country, then filled them with vegetable oil to haul back to their origin without cleaning the truck. The reporter claimed to have followed a tanker truck across the country from Xi'an to Hebei Province and back again. It was said that the practice hauling food-grade oil in chemical trucks without cleaning was an "open secret" in the industry. 

In August another party-controlled media outlet, China Central TV, published an "investigation" of the dirty cooking oil trucks apparently meant to tamp down the latest food safety scandal. CCTV mostly regurgitated the same material that was in the original report and blamed cost-cutting drivers and lack of cleaning facilities. The communist party itself was not blamed. CCTV blamed inept municipal officials and "extremely bad illegal behavior" by truck and warehouse owners. The government was presented as a hero by reporting that it arrested and prosecuted 5 people found responsible, listing laws and regulations violated, promising to require trucks be dedicated to transporting vegetable oil and stepping up enforcement of regulations. While the original report said the practice of contaminated vegetable oil trucks was an "open secret", the August report pronounced that no other cases of dirty trucks were found.

The absence of news media reports on a problem does not mean it has gone away. There were many news media reports of farmers feeding restaurant waste to pigs until 2020 when it was blamed for spreading African swine fever and consequently banned. Since 2020 there have been no news media reports of swill feeding. Does that mean the problem has been wiped out by the ban? Probably not. Indeed, it may be encouraged: a commentary in Economic Daily last week reported new efforts to promote use of table scraps to feed livestock as a strategy for reducing use of soybean meal in feed. This year news media have been reporting on China's exports of "gutter oil" to the United States for use as biofuel. Gutter oil is usually obtained by cooking down restaurant waste, the process that produces swill used for feeding pigs. 

Now that most foreign journalists have been kicked out of China, the communist party media are the only ones left to "tell China's story." And that may be by design. We are returning to the Mao era when we knew nothing of China except what the communist party wants us to know. During the 1960s journalists and diplomats used to watch China from Hong Kong, try to interpret newspapers and interview refugees, but now even Hong Kong is not available.

African ag ministers discuss China ag collaboration

China's agriculture minister met with African counterparts to jumpstart promises of agricultural aid made at the Forum on China-Africa Cooperation held in Beijing last week. While 50 African nations attended the Forum where agriculture was a featured item, China's Minister of Agriculture Han Jun met with only 5 agriculture and fisheries ministers. One agreement was signed and one was discussed.

"Accelerating agricultural modernization in Africa" was chapter 6 of The Beijing Action Plan (2025-2027) released by China's Ministry of Foreign Affairs at the Forum, encompassing about 4 of the Plan's 70 pages. It includes sections on science and technology, poverty reduction and rural development, and food aid. 

The document calls for achieving "agricultural modernization" in Africa. China has been pursuing agricultural modernization since the 1950s and still hasn't achieved it (judging from many Chinese documents that still call for pursing agricultural modernization). China promises to send its companies to produce fertilizer, pesticides, and small agricultural machinery to help Africa pursue "import substitution." The document includes many of the same items featured in Chinese agricultural policy documents such as raising productivity, reducing costs, building agro-eco-tourism parks, improving soil health, water-saving irrigation, reducing food loss, e-commerce, development of geographic indicators, and prevention and reduction of natural disasters. 

China pledged to build remote sensing centers, earth science laboratories and meteorological stations in Africa (at least one recent Chinese document included an aspiration to develop its own systems for remote sensing and other agricultural monitoring data). China plans to help Africa with rice value chains and new varieties of cassava (China is the world's leading importer of both rice and cassava, but China doesn't import either commodity from Africa).

The document affirmed the goal of African agricultural exports to China reaching $20 billion by 2030 (set at a forum last year). Least Developed Countries will have tariffs cut to zero; China pledges collaboration between African free trade zones and Chinese tariff-free zones; and will cooperate on agricultural product inspection and quarantine. China will encourage new foreign direct investment in Africa's agricultural sector.

China promised initiatives for safe drinking water and health of rural women and children in Africa. Africans should be aware that no drinking water in China is safe and should read the book Invisible China which finds poor nutritional and educational status for rural children in China.

On September 3--before the big meeting--Chinese Minister of Agriculture Han Jun met with agriculture ministers of Burundi, South Africa, Democratic Republic of Congo, Uganda, and the Fisheries Minister of Sierra Leone to promise aid and cooperation. Few specifics were reported by China's Ministry of Agriculture and Rural Affairs, but areas of cooperation broadly corresponded to those included in the Action Plan. 

China promised to send more foreign experts to Burundi and promised collaboration between Chinese and Burundi companies on seed production, agricultural machinery assembly and maintenance, and agricultural product processing. The Chinese and Burundi ministers signed a memorandum of understanding on agricultural cooperation. 

Democratic Republic of Congo's minister was eager to conclude a memorandum of understanding on agricultural cooperation with China asap. He hopes China's assistance can improve yields of corn, rice and other grains and boost industries with local features. 

In his meeting with the Ugandan minister China's ag minister promised to follow up on pledges of agricultural cooperation made by top leaders of the two countries. The Ugandan minister highlighted agricultural research and training exchanges as a priority. 

China and South Africa will pursue capacity building, animal disease prevention and control, poverty reduction, and support scientific research institutions. The South African minister was receptive to more practical cooperation in agriculture.

Sierra Leone's minister of fisheries pronounced her country's cooperation on fisheries with China as having a "good foundation" in her meeting with Han Jun. This may have been an awkward meeting since news media have reported complaints of overfishing and invasion of Sierra Leone's territorial waters by Chinese fishing trawlers. Even Sierra Leone's president has made this issue a priority. Sierra Leone's minister nevertheless thanked the Chinese government for its assistance in fishery construction and welcomed more Chinese companies to invest in Sierra Leone. The report of the meeting did not include any comments from China's minister.

Lower prices for China's harvest in 2024

With Chinese farm prices down 10-to-18 percent from a year ago, the upcoming fall harvest looks set to deal a painful blow Chinese farmers' earnings. 

Weekly prices from China's National Grain and Commodity Reserves Administration show the late-August 2024 procurement price for corn at RMB 2306 per metric ton, down 18 percent from a year ago. The collapse of Chinese corn prices occurred during last year's peak marketing season, from September 2023 to February 2024. Corn prices weakened again last month as the new corn procurement season approaches, suggesting that growers of China's largest crop may get hammered when they sell their grain this fall. 

Compiled from China National Grain and Commodity Reserves Administration.

Chinese soybean prices are down for the second year in a row. The average domestic soybean procurement price was RMB 4649 per metric ton at the end of August, down about 10 percent from a year ago. Chinese soybean prices fell during the last two marketing seasons. This year's August price is 23 percent below the peak in 2021/22.

Compiled from China National Grain and Commodity Reserves Administration.

The wheat marketing season is winding down. Chinese wheat prices have been on a 4-month slide since the 2024/25 marketing season began in May. The average August 2024 wheat price of RMB 2463 per metric ton is down 14 percent from a year ago. Chinese wheat prices are down 24 percent from their peak in December 2022. 

Compiled from China National Grain and Commodity Reserves Administration.

Chinese rapeseed is also in the midst of its marketing season. Rapeseed prices averaged RMB 5960 per metric ton in August, down 9 percent from a year ago. Rapeseed prices began their decline in April-June 2023, fell again this past spring, and August 2024 prices are down 12 percent from their peak two years ago. 

Compiled from China National Grain and Commodity Reserves Administration.

Declining prices and revenues could mean that many farmers do not cover their costs this year. China's official cost and returns survey shows that corn was profitable in 2021 and 2022. However, the decline in prices this year likely will fall below production cost for corn. 

Compiled from China National Development and Reform Commission
agricultural product cost and returns data.

Chinese officials are likely quite nervous. City people are already growing impatient with the collapse of the property sector, economic mismanagement, unemployment, and the zero-covid debacle. The prospect of disgruntled farmers and rural uprisings could bring the situation to the boiling point. 

Moreover, Chinese officials worry that losses on this year's crops could prompt farmers to abandon fields, threatening national food security. Their soybean and rapeseed recovery plan has led to plummeting prices for both oilseeds.  

Officials are likely to clamp down on wheat and corn quotas to limit imports in the hope of goosing prices upward. Low rapeseed prices surely were a partial motivation for China's announcement this week of an antidumping probe of Canadian canola. Watch for new antidumping probes and discoveries of contaminants and phantom GMOs, or substandard imports as officials try to boost prices for the upcoming harvest.

Lysine export boom belies amino acid-soymeal substitution claims

Chinese officials claim that livestock producers are substituting amino acids for soybean meal in animal feed, reducing China's reliance on imported soybeans. A spike in China's exports of the main amino acid is inconsistent with these claims.

China has built massive amounts of processing capacity to produce lysine--the most common amino acid--from corn (the main raw material). China is now the world's dominant lysine producer and exporter. Yet a November 2023 report by China's Mysteel agricultural market site said production of lysine is less than half of China's production capacity. Mysteel said China's amino acid industry suffers from serious excess capacity.

At peak output in 2020 Mysteel reports that China used 11 million metric tons of corn to produce lysine and other feed additives. Since then production has slipped to 8 million metric tons in 2023 due to weak feed demand and high corn prices. This does not agree with proclamations from Chinese officials that amino acid is replacing soybean meal at a rapid clip.

Meanwhile, China's exports of lysine have boomed. Exports began to accelerate in 2016 when Chinese officials began giving subsidies for every ton of corn--the primary raw material for lysine--used by industrial processors to dispose of a massive stockpile of Chinese corn. China's lysine exports grew from 257,000 metric tons in 2014 to 405,000 mt in 2018 and 785,000 metric tons in 2020. The corn stockpile was finally depleted in 2020 and subsidies ended. That year officials first announced the plan to replace soybean meal with amino acids. Chinese corn prices also shot up 40 percent that year, increasing the cost of raw material. Nevertheless, lysine exports kept growing to reach 961,000 metric tons in 2023. U.S. lysine exports were only 87,000 metric tons that year.

Source: China and U.S. customs data.

China's exports have overwhelmed the global market for lysine. In 2012 China was one of 5 major lysine-exporting countries. By 2023 China was the dominant exporter as its overseas sales boomed over the decade that followed while sales by other major exporters--the United States, Indonesia, Brazil, and South Korea--shrank precipitously. 

Source: customs data

If Chinese livestock producers are eagerly using lysine to replace soybean meal, why are Chinese lysine exports booming? The claims of growing lysine use in China do not square with reports that the amino acids industry is suffering from serious excess capacity problems.

Anthrax cases reported to skeptical Chinese public

Chinese state media reported an anthrax outbreak that infected 5 workers on a beef cattle farm in Qiji Town in western Shandong Province. Authorities apparently waited until they could no longer cover up the outbreak before issuing a public report. Social media reveals skepticism about government reporting on disease outbreaks.

According to a report issued August 2 by China Central Television (and in English by China Daily), five workers on a beef farm in Shandong Province's Qiji Town had "mild" infections of anthrax on their skin and are being treated in isolation. The outbreak was in Yanggu County in western Shandong's Liaocheng City. Authorities said all animals on the infected farm have been culled and properly disposed, local farms have been quarantined, the local area has been sanitized, and testing has found no indication of disease in other people or animals. 

The report explained that anthrax is an acute zoonotic infectious disease caused by Bacillus anthracis. It is mainly prevalent in herbivorous animals such as cattle and sheep. Humans are usually infected through contact with sick animals or animal products, and often experience symptoms such as high fever, vomiting, and diarrhea.

An X post by anti-CCP news outlet Epoch Times showed a screen shot of an August 1 notice (a day before the official report) by a financial company in the county that warned against visiting Qiji Town or eating beef or mutton due to the anthrax infections on a farm there. The company claimed the notice was fake. The X post also quoted a denial of rumors of human deaths issued by the village committee of Qi'er village in Qiji Town. The village committee said cattle had become sick more than half a month earlier, but the animal carcasses had been burned or buried with no transmission to humans. 

According to the Epoch Times post, that same afternoon an employee of the local Chinese center for disease control (CDC) confirmed the infections to a reporter and said other townships had also had infections. When asked whether the anthrax had spread to humans, the employee said he didn't know because leaders were in a meeting. He could only say it was under investigation

A compilation of screenshots by secretchina.com displayed a July 27 "Notice on strengthening prevention and control work" issued by the Shandong Province Livestock Veterinary Bureau. The notice said the Bureau had been notified by telephone that 4 cattle had tested positive for anthrax. The notice said Yanggu county "appeared to have quite a few problems" and the Bureau said it would be conducting tests focused on Qi'er village.

Screenshots from local social media posted on X August 1 (the day before the official report) said 80 of 100 cattle on the Qiji Town farm had died of anthrax without being reported to higher authorities. Three villages were locked down, and the 4th floor of the county hospital had been sealed off. The post warned readers not to eat in Qiji Town. Other posts reported the number of dead animals as '40' and '80 to 90', and a rumor said 15 people were hospitalized.

Another post said that the beef cattle farm owner at first denied having sold his diseased cattle, but later admitted that he had frozen most of the beef but sold some bones when he ran out of storage. 

Several detailed descriptions of anthrax have been published by Chinese scientists in English-language journals. A chronicle of over 120,000 human anthrax cases reported to China's CDC from 1955 to 2014 found that cases had been on the decline since 1978. Most infections were among farmers, herdsmen, and people who slaughter animals or trade in meat, bones or tallow in western and northeastern provinces where cattle and sheep are common. Cases are most common during the summer months of July and August. 

A more recent epidemiological study of human anthrax in China reported 1,244 cases in 53 outbreaks during 2018-21. This study noted a rebound in anthrax cases in 2021: the number of cases increased and cases occurred in new locations. Most human infections were on the skin (not respiratory or gastrointestinal). The authors attributed the anthrax rebound to inadequate supervision of diseased animals as well as updated diagnostic criteria. (Note that the 2021 anthrax rebound followed several years of high attention to animal disease prevention during the African swine fever epidemic of 2018-20). 

Another study investigated a very similar anthrax outbreak during 2021 that also occurred in western Shandong Province. No cases had been reported in Shandong since 2015 when the 2021 outbreak occurred. In August 2021 the local public health center reported 7 cutaneous cases to China's CDC. The outbreak occurred in 2 towns and 3 villages in Cao County, part of the Heze prefecture. The authors searched medical records and found an additional 6 cases of confirmed anthrax, increasing the known total of cases to 13. They tested 125 samples from places where cattle were slaughtered, processed and stored and found 34 positive samples for 8 strains of the anthrax bacillus in freezers, cutting boards, a meat grinder, the ground where cattle were slaughtered, a butcher shop floor, a cattle truck, bone cutter, freezer handle, meat hook, bone saws, and meat carts.

The infections in 2021 were traced to a single family that had purchased 32 cattle from a neighboring province, of which 20 cattle had been in poor health since July. The sick cattle were sold to families in 3 villages where family members and others who slaughtered the cattle apparently contracted anthrax during July and August 2021. One sickened person picked up tallow and bones to sell and another bought beef from the infected farm.

The study of the 2021 outbreak identified the frequent movement of livestock across provinces as a contributing factor. The address on the animal health certificate appeared to be fraudulent, so the original source of the cattle could not be determined. Fraudulent certificates and interregional animal shipments had been identified as contributing factors to the rapid spread of the ASF epidemic 2 years earlier. High temperatures and rainy weather are also conducive to anthrax infections. They linked the skimpy clothing worn by butchers during hot summer months to skin infections.

The study authors said cutaneous anthrax is usually curable with prompt antibiotic treatment, but they also said 10-20% of patients die.