High-tech Hog Companies Enjoy Dip in Feed Prices

Corporate behemoths are gaining a commanding position in China's hog farming sector. In 2024 twenty companies listed on Chinese stock exchanges produced a combined 168 million hogs, 24 percent of China's national hog output reported by the National Bureau of Statistics. The publicly listed hog farming companies had a combined market cap of 615 billion yuan (about $85 billion) in February. These companies claim to have transformed hog farming with their high-tech operations, but they haven't eliminated the volatility that stems from movements in feed prices and profit margins.

Just 3 of those companies account for most of the growth in China's corporate hog sales. Muyuan Foods stands out with hog output growing from 3.1 million to 71.6 million between 2016 and 2024. Wens Foodstuff lost its place as top hog producer despite nearly doubling its hog sales from 17 million to over 30 million head between 2016 and 2024. New Hope's output grew from 1.7 million head to 16.5 million head during 2016-2025. A second tier of companies producing 2-to-6 million head have also grown, but they are far behind the top three. 

Compiled from company reports.

The growth of these companies is surprising in view of the historical dominance of "backyard" hog farms in China. China's disastrous African swine fever (ASF) epidemic in 2018-19 was a catalyst for growth in corporate hog farming, as the epidemic forced out many small and medium-sized farms while policies to restore pork production favored large-scale farms. Agriculture Ministry data show the number of mega-farms producing 50,000 head or more grew from 443 to 849 between 2018 and 2021.

Chinese officials love big companies because they believe the companies are easier to control and have the financial resources to pursue the magical high-tech future envisioned by communist leaders. A string of articles last week lauded high-tech applications made by pig farming companies. 

In a celebration of its anniversary last week, Muyuan Foods proclaimed great success in sterilizing barns to keep them free of disease, controlling odor, and pursuing the agriculture ministry's goal of eliminating soybean meal from animal diets. An executive said Southeast Asian counterparts have been impressed with China's ability to control African swine fever, Muyuan built a high-tech farm for a Vietnamese company, and Muyuan exported deodorization and sterilization equipment to Southeast Asia. 

New Hope Group's executives told China Securities Journal their company is using manure ditch cleaning robots that have autonomous navigation that no longer need to be operated by remote control. Handheld gadgets can weigh pigs, avoiding the need to drive pigs to be weighed on a scale. Another sensor can count the number and weight of live pigs or piglets based on their size and shape without manual counting. One scientist identified as both a New Hope employee and director of a Ministry of Agriculture lab described the use of artificial intelligence in breeding selection, automatic adjustment of ventilation and cooling, as well as choosing the optimal time and weight for releasing pigs to the market. 

Wens Foods says it has collaborated with Huawei since 2021 on application of robots, AI, cloud computing, internet of things, etc. in livestock farming. 

Chongqing Daily described a tech company in Chongqing's Rongchang district as the "brain" of the industry that provides systems for "pig farms of the future." A manager explained that digital solutions using sensors and constant monitoring of the environment, temperature, and feed are superior to traditional manual control based on the "feeling" and "visual observation" of farmers or employees. The article explained that eliminating employees with digital gadgetry allows one worker to raise 3000 hogs, whereas traditional methods required 3 to 5 workers to raise 1000 hogs.

The large hog companies regularly announce reductions in production costs, giving the impression they are making great strides in efficiency. Several years ago, the breakeven price for hogs was widely believed to be about 15 yuan per kg. Muyuan claims to have reduced its production cost to 12.5 yuan per kg this year, and New Hope Group claims to have reduced its cost to under 13 yuan. However, the reductions in cost may actually be due to falling grain and soybean meal prices that have cut feed costs.

A Shandong Province cost of production survey of common farms reported a breakeven price of 13.07 yuan per kg for a 120-kg farrow-to-finish hog in the first quarter of 2025. The Shandong data show that feed comprised over 60 percent of hog production costs (965 yuan of the cost of 1523 yuan per head). 

Agriculture ministry data show that the average cost of hog feed in China has fallen about 15 percent since its last peak in October 20223. All hog producers enjoyed fat profits during 2024 as hog prices rose about 50 percent to their peak of 20.35 yuan in August while feed prices were plummeting. Muyuan and Wens declared two dividends last year. 

Ministry of Agriculture and Rural Affairs market prices.

Profit margins stimulated expansion during the second half of 2024 that drove hog prices down to just 14.6 yuan in June 2025. Muyuan Foods--the largest producer--had the biggest spike in sales.

Hog sales from company reports.

Comparing monthly sales by the top 3 companies with measures of aggregate industry output indicates that expansion in hog production during the second half of 2024 was broad-based. Sales by the top 3 companies was still only about one-third of "above-scale" slaughter (reported by the ag ministry) and about 16 percent of monthly slaughter reported by the National Bureau of Statistics. All three series indicate an expansion of hog output during the second half of 2024, but the increase by the top 3 was only a small fraction of the run-up in industry-wide hog slaughter reported during the second half of 2024. 

Company performance reports; Ministry of Agriculture and Rural Affairs slaughter by "above-scale" facilities; quarterly National Bureau of Statistics quarterly slaughter averaged over 3 months.

Still, not all of the leading companies expanded last year. New Hope--mainly a feed manufacturer--suffered financial losses in 2024, and its hog production fell. New Hope claims to have regained profitability in 2025. Several others reported big declines in hog sales last year, including COFCO Joycome--the one state-owned hog company--and Tianbang and Aonong--two other high-flyers in recent years.

It's worth noting that not all hog farming companies are unstoppable juggernauts. Yangxiang, a company that wowed foreign visitors with its pioneering multi-story hog complex about 8 years ago, faded into the background after its IPO was undermined by unusual dividend payouts and a shady customer base. Chuying, one of the rising stars in 2018 imploded that year and tried to pay back investors with hams. Zhengbang was the number 2 producer in 2021, but its production has plummeted since declaring bankruptcy a couple years ago. Wens foodstuff was hit hard by the ASF epidemic (and by an avian influenza outbreak about 12 years ago) before recovering robustly post-ASF. 

May Imports: Soybean Surge Offsets Crash in Grain and Cotton

China's imports of agricultural products during May 2025 totaled $19.9 billion, almost the same as its imports in May last year, according to Chinese customs data. May was the first month in 2025 that Chinas' agricultural imports did not decrease from a year earlier.

China customs administration definition of "agricultural."

The most prominent changes in China's May 2025 agricultural import bill from a year ago were a $1.13-billion increase in soybean purchases that was offset by a $902-million decrease in cereal grain imports, and a $473-million plunge in cotton imports. Imports of sugar, fats and oils, dairy, cassava, and seafood were up. Imports of fruit, nuts and meat were down year-on-year.

Calculated from China Customs Administration data.

China's imports of Brazilian soybeans soared to 12 million metric tons in May as seasonal arrivals from South America ramped up and inspections at the border accelerated. The May soybean import volume was up almost 3-fold from April, and it exceeded the year-earlier volume by more than 3 million metric tons. Soybean imports from Brazil had been running behind year-earlier volumes during the first 4 months of 2025. Meanwhile, China's imports of U.S. soybeans tailed off to 1.6 million metric tons in May due to seasonal patterns, trade tensions, and tariff increases. Some of the U.S. soybeans might have arrived in April and cleared lengthy customs inspections during May.

China customs data; transgenic soybeans.

China customs data; transgenic soybeans.

China's cotton imports totaled 276,888 metric tons in May, down more than a million metric tons from 1.315 million metric tons in May 2024. China's cotton import from both Brazil and the U.S. were down sharply.

China's grain imports were sharply lower than year-earlier volumes, as they have been each month in 2025. The cumulative total of cereal grain imports for January-May 2025 is 10.15 million metric tons, down 66.6 percent from the same period last year. Corn imports so far this year are down 94 percent, and wheat imports are down 80 percent from the same period last year.

In May 2025, China imported 188,540 metric tons of corn, down from 990,000 metric tons from May last year. China's imports of Ukrainian corn were down $166 million (706,633 metric tons), while imports of U.S. corn were down $40 million (down 161,816 metric tons), and imports of Brazilian corn were down $7.6 million (down 28,814 metric tons). There were small year-on-year increases in China's purchases of corn from Russia, Kazakhstan, and Myanmar.

May 2025 imports of wheat reached 545,000 metric tons, down from 1.84 million metric tons a year ago. China reduced its imports of wheat from all its trading partners. Imports from the U.S. were down 361,000 metric tons from a year ago, and imports from France were down 617,773 metric tons. China had smaller decreases in wheat purchases from Canada, Australia, and Kazakhstan. 

China's May imports of sorghum were 379,000 metric tons, down from 671,000 metric tons a year ago. China slashed May purchases of U.S. sorghum by 526,157 metric tons from last year, partially offset by increases in sorghum purchases from Australia (up 231,2250 metric tons) and from Argentina (up 2,938 metric tons).

May poultry imports were down 25 percent by volume year-on-year and beef imports were down 17 percent, but pork imports were up 11.7 percent year-on-year.

China's May imports of U.S. beef were down $65.3 million from a year earlier, and imports of beef from Argentina were down $95.4 million. Its beef imports from Australia were up $63.3 million and beef imports from Brazil were up $16.1 million from year-earlier volumes. Imports of Uruguayan beef were down $10 million.

China's May imports of U.S. pork and offal were down $20.4 million from a year earlier. Pork imports from Brazil were also down $15.9 million, but pork and offal imports from Spain were up $29.5 million.

China's soybean meal percentage of feed is meaningless

Chinese officials have been pushing feed mills and livestock farmers to reduce their use of soybean meal in animal feed for more than 5 years. They like to point to percentages of soybean meal and corn in manufactured feed reported by the quasi-government China Feed Industry Association (CFIA) as evidence of progress on this campaign. However, these percentages have no correspondence to soybean imports and are essentially meaningless. 

CFIA has included the percentages of soybean meal and corn in animal feed in its reports of monthly feed production since 2021. CFIA occasionally skips a month, never issues a December report, and occasionally omits the percentages. Agricultural officials occasionally cherry-pick percentages from these reports to demonstrate the success of their programs to cut soybean meal use.

The percentage of soybean meal compiled from monthly CFIA reports from 2022 to 2025 in the chart below shows no obvious trend in the percentage. High values of 15.6 were reported during several months of 2022, and low values of 12.1 percent were reported in April-May 2025. But values of 12.5 and 12.7 were also reported in other months of 2022, and values of 13.3 percent were reported in January-February 2025. 

The percentage of soybean meal is remarkably stable in comparison with the percentage of corn used in feed, which is higher and fluctuates more than the soybean meal percentage. The corn percentage ranged from as low as 22.8 percent in July 2023 to over 47 percent in 2025. The corn percentage appears to have a seasonal pattern. Low values during summer months likely correspond to an increase in seasonal supply of wheat and wheat bran that can substitute for corn in northern regions of China, while the peak during January corresponds to the seasonal availability of corn. 

Compiled from China Feed Industry Association reports.

The soymeal and corn percentages add up to 40%-to-50% most months. CFIA never reports what makes up the other 50%-to-60% of feed ingredients: sorghum, barley, wheat, distillers grains, cassava, whey, fish meal, other protein sources, etc. Substitution of wheat for corn could reduce the need for soybean meal to some degree since wheat's protein content is higher than corn's.

Chinese officials say the reduction in soybean meal use will result in a big drop in soybean imports. That did not happen in 2024 when CFIA reported that use of soymeal decreased by 2.4 million metric tons (mmt), yet customs data showed that imports of soybeans increased by 7.2 mmt during the calendar year. 

The lack of correspondence between CFIA data and soybean imports can be demonstrated with monthly data. CFIA never reports the actual amount of soy used, but the implied amount can be calculated by multiplying the reported percentage of soymeal used in feed by the volume of feed produced (excluding additives which have no soymeal). The chart below shows this monthly volume charted against the potential supply of soymeal calculated as 70% of monthly soybean imports. 

Again, there is no declining trend in soymeal consumption based on the CFIA data. Use of soymeal implied by the CFIA data is low and fluctuates very little from month to month compared with supplies implied by imports. During 2023 and 2024 the potential supply of soymeal far exceeded the amount used in feed implied by the CFIA data. The flat use of soybean meal implied by the CFIA data would not have predicted the increase in soybean imports in 2024. CFIA data imply flat use of soymeal in 2025 so far, but imports were unusually low during January-April before exploding to record-high in May 2025.  

Soybean meal use calculated from China Feed Industry Association data.
Soybean meal supply is 70% of monthly soybean imports (HS 12019019).

The conclusion is that the Feed Industry Association's percentages are not useful as an indicator of China's demand for imported soybeans. 

Soybeans have staying power in China because they are the cheapest and most abundant source of both protein for feed and edible oil in China. Soybean meal and oil will retain its dominance as long as the products are cheap and cost-effective. It's true that China's growth in soybean consumption will not continue on its past path of relentless growth. But be skeptical when you hear Chinese officials citing their data about percentage of soybean meal in feed as a portent of declining soybean imports.

Policy Bank Ups Funding for Summer Grain Procurement

In another sign that Chinese officials are eager to keep farmers happy during a year of low crop prices, the Agricultural Development Bank of China (ADBC) pledged to increase financing for purchase of summer grains. ADBC allocated 150 billion yuan (over $20 billion) to fund purchase of this year's winter wheat, rapeseed, and the early-season rice crop, an increase of 40 billion yuan (about $5.5 billion) from last year. The announcement was made at the ADBC's June 13 meeting to launch financing of summer grain procurement.

The ADBC is the Chinese government's rural policy bank that finances procurement of commodities for government reserves and other rural policies, viewed as a backstop to stabilize markets. The bank's most recent public report for 2023 said ADBC financed more than half of grain that year with funds totaling 323.7 billion yuan issued by the bank. The 2023 report also showed a 70-percent increase in nonperforming loans that year. As of June 2025 the ADBC has not issued an annual report for 2024. Yesterday, the ADBC issued 14 billion yuan (nearly $2 billion) in bonds to fund its operations. 

The increase in the bank's credit funding is meant to prop up markets for summer-harvested crops. China's wheat and early-rice procurement prices in the first week of June are down about 4 percent from a year ago and the average rapeseed price is down 2 percent from a year ago, based on prices reported by China's National Food and Commodity Reserves Administration. 

Earlier this month China's grain reserve corporation announced procurement of wheat at minimum prices in Henan Province. ADBC funds will finance these purchases. Early rice procurement at minimum price is also possible this summer (the average price is currently close to the minimum set for 2025), but rapeseed is not covered by a minimum price program. Chinese authorities maintain reserves of early rice, wheat, and rapeseed oil that are rotated year by year. 

The ADBC's meeting held in Nanjing included the headquarters deputy director and officials from branches in summer grain-producing provinces. Officials were told that they must take the initiative in credit for summer grain purchases to ensure that farmers can sell their grain smoothly and to ensure market stability. The priority is to ensure funding for replenishing grain reserves and buying grain at minimum prices without cutting into private sector grain procurement. Officials said they would work with local authorities to address the problem of substandard grain procurement. 

China Wheat Prices Sinking Despite Drought Impact on New Crop

China's wheat crop was hit by drought this year, but authorities are nevertheless scrambling to prop up sinking wheat prices. Several years ago, Chinese officials made farmers tear up fruit trees and cash crops so more food grains could be planted. Now farmers are seeing low yields and bad prices for the wheat officials forced them to plant.

As reported here last month, there have been reports of sustained drought conditions in parts of China's wheat belt. During an inspection of the wheat harvest in Henan Province last week China's Minister of Agriculture and Rural Affairs Han Jun acknowledged that parts of the largest wheat-producing province had experienced sustained drought, but he insisted that efforts to ramp up irrigation had reduced damage to the crop. Most of the article recounted Han's urging of officials and farmers to boost wheat yields and improve disaster prevention efforts.

A report by futures market analysts gave an evaluation of the new wheat crop that government officials fail to provide. They concluded that wheat yield this year declined between 4% to 15% in most districts of Henan and Shandong, China's two largest wheat-producing provinces. The most serious declines were in western and northern parts of Henan, especially in hilly and mountainous areas where irrigation was not feasible. The regional breakdown was consistent with earlier reports of serious drought. Artificial rainfall added moisture in a few areas, but wheat stalks became prone to lodging. On the other hand, many districts in Shandong and the Xinxiang district of Henan had steady or slightly higher yields this year. 

Wheat analysts interviewed by 21st Century Business Herald gave similar reports of poor wheat yields in southern parts of Henan and mountainous areas where irrigation was lacking. Analysts said wheat that was harvested had good quality as measured by test weights, high gluten, and low vomitoxin.

The decline in wheat yields did not reduce China's crop enough to prevent wheat prices from falling. The National Bureau of Statistics producer price index for wheat in Q1 2025 was down 3.7% from a year earlier. Average wheat procurement prices posted by China's Food and Commodity Reserve Administration in the first week of June are 2%-to-4% lower than a year ago in provinces of the major wheat production belt. The decline is steeper in western provinces Sichuan, Gansu, and Xinjiang.

An analyst told 21st Century Business Herald that wheat prices are under downward pressure due to weak downstream demand from flour and feed mills who are cautious in purchasing wheat. The average wholesale price for flour reported by the Food and Commodity Reserves Administration is down 10.6 percent from a year ago.

Wholesale prices reported by Administration of Food and Commodity Reserves.

On June 6, officials announced the launch of market intervention purchases of wheat in Henan Province at the minimum price level of RMB 2380 per metric ton. This is the first time the minimum price purchase program has been activated since 2020. 21st Century Business Herald said the decision to launch the intervention in Henan was due to prices falling below farmers' "psychological defense level."

Procurement prices reported by Administration of Food and Commodity Reserves.
Minimum price for wheat set annually by National Development and Reform Commission.

Economic Daily commentator Liu Hui emphasized measures authorities are taking to make it easier for farmers to sell their wheat. In addition to launching the minimum price procurement, Li cited this year's purchases of new wheat to "rotate" grain reserves, an increased number of purchasing points and offering of rest areas, cups of tea and heatstroke prevention medication at grain purchasing warehouses as measures to facilitate farmers' grain sales in the summer heat. Over the past two decades officials have often trumpeted measures to make grain sales more convenient. They fear a repeat of rural dissatisfaction that threatened to boil over in the late 1990s when government grain stations refused to buy grain, downgrading it, or by issuing IOUs as payment. 

The futures analysts' report estimated that area planted in wheat was steady this year. They noted that wheat area had expanded in 2023 and 2024 after officials used aggressive tactics to force farmers to convert land from fruit orchards and cash crops to grain fields. ...Are some of those farmers now annoyed that they are losing money on wheat they were forced to grow? 

Market analysts are also watching a convergence between sinking wheat prices and rising corn prices. Putting a floor under wheat prices may prevent corn and wheat prices from reaching parity, an event that might encourage even more use of wheat in animal feed.

Chinese State Farm Tiptoes into Brazil: What's Going On?

China's Hulunbuir State Farm Group signed an agricultural cooperation agreement with Brazil's National Agricultural Society in February 2025. What is this Chinese company with an unpronounceable name? We're likely to see more of these companies in the global agricultural space, so let's take a look at who they are.

"Hulunbuir" is a Mongolian name for the district of Inner Mongolia where one of hundreds of Soviet-style state farms were set up in the 1950s to consolidate communist party control over empty parts of the country. Hulunbuir is made up of grasslands that resemble the U.S. Great Plains or parts of Brazil's interior. In recent years these bureaucratic operations have been dressed up as companies with new names like Hulunbuir State Farm Group. Statistics indicate State Farms control 7.2 million hectares of cropland and produce 5-to-6 percent of China's grain output. 

One of Hulunbuir Group's farms. Source: Hulunbuir web site.

Brazilian news media have referred to Hulunbuir as a "giant," probably based on its claim to have nearly 1 million acres of cropland and an even larger area of grassland. The land is owned by the State, the farm reports to the agriculture ministry, and its farmers are employees. Unlike China's smallholder farms, State farms have access to bank loans and they are included in the government's budget. 

The Hulunbuir agreement appears to have been hastily put together as part of a diplomatic scramble to build goodwill in Latin America led by Inner Mongolia. 

Online Brazilian sources indicate a deputy leader from Hulunbuir arrived in Brazil in late January with several underlings to sign a vague agreement to cooperate with the Brazilian Agricultural Society. Two weeks later Inner Mongolia's communist party secretary arrived in Brazil with a big delegation to sign 17 agreements at an investment and trade meeting and other events with an agricultural focus. Inner Mongolia news media reported that the trip had been ordered by Xi Jinping and was framed in Xi's rhetoric about "building a shared future." The trip was so important that it was made during the Chinese New Year holiday. 

The Hulunbuir agreement with the Brazilian Agriculture Society is apparently not a priority in China. It was not mentioned in the Inner Mongolia account of the trip, although Hulunbuir's agreement with a Uruguayan company in the second leg of the trip did rate a brief mention. The trip was not apparently covered by any other Chinese media. Hulunbuir Group's web site says nothing about the Brazilian agreement. The site has not posted any news items since an announcement last December of a meeting to instruct people how they should think about religion.

 

A Brazilian source described the February signing of the Hulunbuir Group's cooperation agreement as a guiding instrument for long-term cooperation with no specifics. Seeds and animal breeding were identified as priorities by both the Inner Mongolia story and the Brazilian report.  

An article in Portuguese based on a March virtual meeting claimed that the Chinese company would begin looking for land to grow soybeans, corn and cotton in Brazil in order to expand its global operations. A June 4 article on a Brazilian site hyped the deal as "China Conquering Brazil" and reported that the Chinese group plans to bring "modern irrigation systems, soil management and seeds genetically adapted to extreme environments."

Hulunbuir Group's web site shows that the group is a sprawling web of a dozen companies engaged in crop and livestock farming, food processing and petroleum. Farming is done by hundreds of employees who have land assigned to them.

Farm equipment subsidies get a lot of attention. The site includes a list of more than 800 farms operated by employees and subsidiaries within the Hulunbuir Group that received a total of roughly $1.5 million in subsidies to buy tractors, harvesters, hay balers, planters, and guidance systems ("Bei Dou" China's version of GPS) last year.

Another article last week described John Deere's contribution to modernization of Hulunbuir Group over the last 40 years during a visit to Deere's factory in Tianjin China.  

Hulunbuir farms probably receive subsidies for planting crops. Inner Mongolia's government promises farms will receive subsidies for corn, soybeans, potatoes, a corn and soybean improvement project, and extra subsidies for farms that grow crops on a large scale. One farming company in the Hulunbuir Group mentions receiving a subsidy of about $300 per acre to grow wheat. Despite the massive landholdings, farm equipment, buildings and animal housing shown on the web site, the company's farms and employees receive payments for being located in a "poverty alleviation" area. 

A Chinese Ministry of Agriculture and Rural Affairs article reported in 2024 that 11 of China's state farm companies had 84 foreign cooperation projects in 34 countries. Their overseas holdings included about 384,800 acres of land including 127,200 acres that produced 914,000 metric tons of grain. These projects are meant to serve Chinese diplomatic objectives as well as produce food and other materials like rubber. 

While the numbers sound impressive, the article cited a number of problems. The authors observed that State Farms lack production and management capabilities needed to compete globally, don't enjoy the subsidies and financial support they receive in China when operating abroad, have heavy debt burdens, and lack personnel with international business experience. 

Fourteen years ago, a massive state farm group in Heilongjiang Province called Beidahuang ("Great Northern Wilderness") Group launched soybean ventures in Brazil and Argentina that flopped. Beidahuang is now involved in the expansion of the Santos Port in Brazil. Hulunbuir Group appears to lack international experience. I could not find any evidence of other Hulunbuir Group overseas projects besides the newly signed cooperation agreements. 

The Tianjin State Farm Group's experience in Bulgaria may help evaluate Hulunbuir's foray into Brazil. The Tianjin Group was selected to operate in Bulgaria about 12 years ago as a back door to the European Union that would ship corn back to China and offer technical assistance. In its first year, the Tianjin Group was apparently duped when it was leased worthless Bulgarian land and couldn't communicate with workers. It became engaged in wine and rose fragrance businesses. With a puzzling mix of commercial and technical assistance objectives and volatile corn market, shipments of corn to China have been inconsistent over the years. In 2024 imports from Bulgaria totaled 76,400 metric tons.

We will be seeing Hulunbuir Group and similar Chinese companies in the agricultural space and they should be taken seriously. But no one should expect them to be an unstoppable juggernaut just because they're huge and have pretty pictures, huge buildings and shiny equipment. 

Fungus smuggling: bioterrorism or China-funded research in a U.S. lab?

A pair of Chinese scholars were caught allegedly trying to smuggle a dangerous fungus into the United States. The case has been portrayed as an agroterrorism plot, but a careful look suggests this was more likely a case of ambitious scholars utilizing an American lab on the down-low to conduct China-funded crop protection research. This is not meant to excuse the smuggling of a dangerous pathogen, but jumping to a false conclusion could unnecessarily heighten U.S.-China tensions.

The case was announced June 3, 2025 by the U.S. Attorney's Office of the Eastern District of Michigan and widely reported in U.S. news media as an act of possible agro-terrorism. Mr. Zunyong Liu (刘尊勇) was caught at the Detroit airport trying to smuggle a fungus called Fusarium graminearum (禾谷镰孢菌) into the United States. Liu was refused entry and sent back to China. He was working with Ms. Yunqing Jian (简云清), a Chinese citizen conducting research at the University of Michigan who had advised Liu on how to smuggle the fungus. Ms. Jian has been detained as a flight risk.

Nearly every article on the event assumes the pair were engaged in a sinister bioterrorism plot, but ABC News reported reactions from U.S. plant pathologists who pointed out that the fungus is already present in the United States and suggested that Jian and Liu were likely motivated by career advancement. A deeper dive bolsters this conjecture.

Fusarium graminearum is a big problem in China that constantly threatens the country's wheat crop. The Chinese Government allocates millions of dollars to prevent a disease called wheat fusarium head blight (小麦赤霉病) or wheat scab caused by the fungus. A fungicide to prevent wheat scab is one of several chemicals sprayed on China's wheat crop, a so-called "one spray and three preventions" organized by government officials each spring since 2012.

Illustration of wheat scab disease. Source: Nantong City plant protection station.

In April this year, Jiangsu Province official media described how Yangzhou University's plant protection faculty were advising a State-owned farm on strategies to prevent wheat fusarium rust. The article emphasized that the political importance of grain production demanded that careful measures be taken to prevent and control wheat fusarium head blight. 

Last month Anhui Province announced a new program funded with RMB 652.67 million (over $90 milllion) to set up a system of forecasting the risk of wheat scab developing across the province during the growing season.  

Drone sprays wheat crop in Anhui Province April 2025
source: Hefei Online.

The Chinese government also funds research to address the wheat scab problem. Articles on wheat scab research in Chinese journals date back to the early 2000s. In a 2024 article in Chinese technical journal Modern Agrochemicals two Nanjing Agricultural University professors described the serious problem of wheat scab in China, chemical control, fungicide resistance and reduction of vomitoxins.

Last month China's communist party paper Sci-Tech Daily celebrated progress on a government-supported project conducted by multiple Chinese research institutes to breed wheat varieties resistant to Fusarium head blight and to improve fungal disease prevention. China's Ministry of Agriculture and Rural Affairs selected the project as an achievement of the ministry's "Spark Technology" program.

The alleged fungus smugglers Ms. Jian and Mr. Liu both are affiliated with research institutes at Zhejiang University, which Sci-Tech Daily identified as leader of the Fusarium control research project. Google scholar shows Jian and Liu co-authored numerous academic papers on experiments examining resistance of Fusarium graminearum to compounds that were published in international scientific journals such as Nature Communications, New Phytologist, and Journal of Advanced Research. The publications identify both Jian and Liu as affiliated with State-supported labs for rice biology and molecular biology of plant pathogens and insects at Zhejiang University in China. 

A counter-terrorism expert told CBS news that Jian and Liu's efforts to conceal the fungus indicated the couple were carrying out a terrorism plot, but this is a non sequitur. Chinese scholars do not need to be engaged in a bioterrorism project to engage in deceit and skirting of rules. The smuggling and deceit Jian and Liu engaged in are standard in China, even for prestigious scholars. In China rules are viewed as inconveniences to be evaded when they stand in the way of opportunity. 

Piecing together details, a possible scenario that led to the smuggling is as follows. 

When Ms. Jian went to the U.S., she and Mr. Liu probably continued their research project on Fusarium in China with Chinese government funding. On her visa application Jian did not state that she would work on Fusarium, so presumably she was in Michigan to work on another project led by her host scientist. 

Jian therefore had no basis for obtaining a U.S. permit to bring the material into the country. Lacking a permit Ms. Jian probably smuggled Fusarium into the U.S. so that she could surreptitiously continue her work with Liu as a side project in the lab where she was working at the University of Michigan. Mr. Liu was caught bringing in the latest batch.

This does not exonerate the couple. Smuggling a hazardous substance into the country is a serious violation of law. Ms. Jian also apparently utilized a U.S. university laboratory to conduct research funded by the Chinese government without authorization or knowledge of the lab's director.

The framing of the case is the concern. The does not look like a state-sponsored plot. Ms. Jian's and Mr. Liu's backgrounds do not suggest a terrorism or bioweapon motive. We should not jump to the conclusion that this incident is proof that China is planning a biological attack. (Of course this does not disprove that possibility either.)

China's rejections of U.S. food shipments are rising

China continued rejecting relatively large numbers of U.S. food shipments in the first 4 months of 2025, according to Chinese customs reports. A rising trend in Chinese rejections of U.S. food shipments has been underway since 2020 for no particular reason.

The European Union and United States had the largest number of food shipments rejected by China's customs inspectors during the first 4 months of 2025. China's customs administration reported rejecting 207 shipments of food from the European Union and 154 shipments of U.S. food during January to April 2025. These two trade partners were way ahead of others in rejections. Japan had the 3rd-largest number of rejections with 81, followed by Brazil (68), Malaysia (66), Vietnam (54), and Taiwan (50). In all, China rejected 1,180 shipments from 50 countries and regions with a volume of 19,187 metric tons. 

Chart shows trade partners that had 50 or more rejections.
Compiled from China customs administration reports.

Most rejections of U.S. foods so far this year fell in several categories: 47 shipments of pork offal, chicken feet, and beef (HS 02 and 1602) from prominent U.S. companies, 47 shipments of beer, cider and other beverages (HS 22); and 35 shipments of food ingredients and dietary supplements (HS 21). Others were scattered over various food categories. January-February rejections of U.S. food were composed mainly of beer, cider, food ingredients, and supplements from two U.S. suppliers. Meat was prominent in the March-April rejections. 

Chinese inspectors cite a variety of problems for rejections. Most problems cited are incomplete or problematic paperwork or labels that do not conform with Chinese regulations. Improper additives and degraded or contaminated products make up a smaller portion of rejections. U.S. beer rejections are cited mainly for labeling and packaging problems. U.S. meat was rejected for documentation, detection of disease, degradation, failure of visual inspection, and detection of growth-promoting compound ractopamine. 

Note that these rejections do not include shipments of bulk commodities like soybeans and grains that comprise a large value of China's agricultural imports from countries like the U.S., Brazil, and Australia.

China's rejections of EU foods were composed largely of swine offal (heads, tongues, feet) from Denmark rejected for an unnamed animal disease and pork from Spain rejected for containing a testosterone compound. Other EU products rejected included a range of products such as beer, tea bags, nutrition supplements, and energy bars.

China has rejected food shipments from over 100 countries since 2018, but the EU (1,935 rejections during 2018-24) and Japan (1,733 rejections) stood out as the trading partners with the most rejections. The U.S. was third with 1,404 rejections. Others in the top 5 were Vietnam (1,278 rejections) and Taiwan (1,242 rejections). 

The U.S. is one of just a few of China's trading partners whose rejections of food shipments have been on a rising trend. China's annual rejections of U.S. food rose from 99 during 2020 to 476 in 2024. This year's 154 U.S. rejections during January-April were up from 119 during the same period last year. 

Rejections of food shipments from Japan, India, Thailand and Malaysia peaked in 2021. Rejections of EU food fell during 2022 and 2023 before more than doubling in 2024 due to a surge of pork rejections. Rejections of food shipments from Taiwan, Vietnam, Indonesia fell after peaking in 2022. 

Compiled from China customs administration.

Brazil and the Philippines are among the few countries with rising rejections of food, but their rejections are fewer in number. China rejected 110 Brazilian shipments and 45 Philippine shipments in 2024. The rise in Brazilian rejections last year was driven by the surge of meat rejections reported here in February: most were beef and chicken feet rejected for documentation issues, a hormone compound, and failure of physical inspections. Philippine shipments rejected included seafood, supplements, noodles, and snack foods like banana chips, rejected mainly for documentation problems.