Dim Sums: Agricultural Markets in China

China will investigate impacts of imported beef on the Chinese industry to determine whether safeguard measures to protect the domestic beef industry from imports are justified, according to an announcement by the Ministry of Commerce on December 27 .  China's national livestock industry association and 9 provincial associations submitted an 81-page application for the investigation that claims the increased volume of beef imports since 2019 has harmed the Chinese beef industry.  The Commerce Ministry's announcement cites a 64.93% increase in beef imports from 2019 to 2023 and an increase in imports' share of the Chinese beef market from 20.55% in 2019 to 30.9% in the first half of 2024 to justify the investigation. The announcement claims that "there is a causal relationship between the increase in import volume and serious damage to China's domestic industry.  An explanation of the investigation posted by The Ministry of Agriculture and Rural Affairs reports tha...

Chinese leaders are celebrating increased grain output in Xinjiang this year as part of their plan to boost the territory's role in national food security.  According to official data released last week, Xinjiang's grain output grew 2.11 million metric tons (mmt) in 2024, Heilongjiang Province increased its output by 2.135 mmt, and Inner Mongolia increased its output 1.427 mmt. These 3 territories along China's northern fringe with broad swathes of grassland, desert, forest and swamps accounted for about half of this year's 11.1-mmt increase in national grain output. MMT=million metric tons. The political importance of the Xinjiang grain initiative is reflected by the number of articles in State media gushing over Xinjiang's grain targets and statistics.  China's Xinhua News Service hailed the increase in Xinjiang's 2024 grain output this week, pointing to a record yield and the largest expansion of area planted of any province-level region. In October--two...

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 sum...

 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 ...

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...

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 r...

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 ...

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...

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 o...

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 a...

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 anal...

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 s...

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 prop...

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...