China's Ministry of Agriculture and Rural Affairs has decreed that the country's livestock industry will reduce use of corn and soybean meal in feed as a strategy for reducing grain imports. However, the new decree mostly recycles ideas that have been pushed for the past 5 years...or even longer.
The Ministry's "Opinion on Implementation of the Livestock Industry Grain-Saving Action Plan" aims to attack animals' consumption of feed grains and protein meals on multiple fronts. Officials plan to promote adoption of precise low protein diets to cut back on use of soybean meal. The plan calls for fully utilizing non-grain feeds such as corn silage and alfalfa, adjusting the mix of livestock species to minimize feed grain use, boost efficiency, and cut production costs. The plan aims to reduce feed intake per animal by 7 percent from the 2023 level by 2030.
At a news conference a Ministry official indicated the livestock feed action plan is part of the broader grain-saving and food waste reduction action plan issued by China's communist party leadership in November as part of so-called "Chinese-style modernization."
This plan is the latest in a series of desperate measures issued since the trade war with the United States to cut back on imports of corn and soybeans, two commodities China imports from the U.S. in large volumes.
- The campaign began in October 2018 with the Ministry's issuance of new feed standards that cut protein requirements in animal feed.
- By 2021 the Ministry had created a database of feed ingredients and launched a program to replace and reduce use of corn and soybean meal in animal feed.
- In September 2022 the Ministry held a seminar where hog-producing and feed companies explained their achievements in using synthetic amino acids in feed to cut back on soybean meal use.
- In April 2023 the Ministry issued a 3-year action plan to reduce soybean meal use in feed from 14% in 2022 to 13.5% by 2025.
A 2022 Ministry of Agriculture and Rural Affairs meeting said feed grains are "the most prominent contradiction" in national food security because demand is growing steadily. The meeting described the soybean meal reduction and substitution program as a necessary choice in view of "uncertainty of international supplies." Cutting imports has become even more urgent this year as corn and soybean prices plunge in China, undermining production incentives and potentially triggering unrest as rural incomes fall.
In 2021, the agriculture ministry issued a list of recommended substitutes for corn and soymeal in swine and poultry feed that was comprised mainly of other commodities that would have to be imported. The list included wheat and rice (which are staple food grains...was it a coincidence that China suddenly imported huge quantities of broken rice in 2021 and '22?), wheat bran (already widely used), sorghum, barley and cassava (which are also imported for feed use), DDGS (which has limited quantities domestically, are vulnerable to mycotoxin contamination, and imports face antidumping duties), rapeseed meal (which can only be used in limited quantities and would require imports of rapeseed), cottonseed (high in fiber, mainly suitable for cattle and is produced thousands of miles away in Xinjiang), palm meal (imported from Southeast Asia), and highland barley (small quantities are grown in far western regions Tibet and Qinghai).
This year's action plan once again promises a feed and animal nutrition database.
Last month the Ministry of Agriculture and Rural Affairs issued its latest report bragging about progress in cutting soybean meal out of feed. One of the projects is using restaurant waste to produce animal feed in 15 pilot cities. (Feeding table scraps to pigs used to be widespread--a real grain-conserving activity--but it was banned during the African swine fever epidemic 5 years ago). There are also two high-tech programs to create protein by fermenting industrial waste and using animal-based protein hydrolysates as feed.
Another project is to feed straw and stalks to cattle and produce grass-fed meat animals. These programs have been around since the 1990s and keep getting resurrected. Subsidies and action plans to grow more corn for silage and alfalfa have been underway for years. Trouble is, Chinese consumers have not been willing to absorb the increase in domestic beef supplies that has already occurred, and beef prices have been falling for two years.
This blog has pointed out before that China's exports of amino acids have boomed since 2018--during the same years the agriculture ministry claims to have popularized substitution of amino acids in diets to replace soybean meal. If domestic use of amino acids is growing so much, how could exports boom? And why haven't soybean imports fallen if farmers and feed mills have cut use of soybean meal?
The agriculture ministry spokesperson claimed that China had already reduced soybean meal use in feed by 23.7 million metric tons since 2017. This number was reached by applying arithmetic to questionable Chinese feed industry data, but the reduction in soybean meal consumption does not square with the ministry's own estimates that indicate growth in China's production of soybean meal. The soybean balance sheets issued by the ministry's CASDE show an increase in soybeans crushed to produce soybean meal from 91.1 mmt in 2017/18 to 97.9 mmt in 2023/24, an increase of 8.8 mmt. These estimates suggest China's supply of soybean meal increased by about 4.7 mmt since 2017, the year before the anti-soybean-meal campaign began. China has not increased its exports of soymeal so the increased supplies must have been consumed in China.
The Ministry of Agriculture spokesperson told Economic Daily to expect lower corn imports in coming years. Import volumes hit new lows during August-November 2024, and the October import volume of 251,000 metric tons was the lowest since December 2019. Economic Daily estimated that calendar year 2024 corn imports would reach 14 million metric tons (mmt), down 13 mmt from the previous year.
Economic Daily suggested that authorities will resume enforcing the tariff rate quota of 7.2 mmt. Imports were allowed to exceed the quota for the last 5 years. A Ministry of Agriculture official told Economic Daily that cumulative corn imports reached 100 mmt from January 2020 to September 2024. The official claimed that bumper harvests had reduced the need for corn imports, and he predicted 2025 imports could be within the 7.2-mmt quota. From now on, imported corn will be used to fill temporary deficits, Economic Daily said.
Economic Daily indicated that lower imports will boost "market confidence" and raise corn prices for China's farmers. The drop in imports beginning in August corresponds to industry news that officials issued orders to companies in processing zones last summer to stop importing corn. The drop in imports lines up with the beginning of China's corn marketing season, surely no coincidence. Chinese corn prices have nevertheless continued to drop after the harvest. Economic Daily expects corn prices to begin recovering after the spring festival.
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| Source: China's customs data. |
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