Dim Sums: Agricultural Markets in China

Chinese leaders--apparently concerned about threats to national food security--have no new ideas after 8 years of Xi Jinping rule. The same Gollum-esque aphorisms about clinging tightly to food bowls were trotted out to address the "complex" and "severe" environment full of "uncertainty." These slogans were introduced in Xi's first year in power in 2013 and have been repeated over and over since then with no change or adjustment. Get a grip on food security. Don't let anyone grab it! A cloud of pessimism hung over the annual "economic work meeting" of China's top officials held December 8-10. Speakers moaned about the pandemic of the century, changes at a pace not seen in 100 years, weak demand, supply pressure and changing expectations. Officials were exhorted to "face up to the difficulties" and "restore confidence."   An official media account declared this the most pessimistic economic work meeting in t...

China produced another record grain harvest, according to a communique on 2021 grain production released by the National Bureau of Statistics . Output was 682.9 million metric tons (MMT), up 13.4 MMT or 2 percent from last year.  Compiled from China National Bureau of Statistics data. A Bureau official attributed the rise in grain production to strict control of cultivated land by each level of government carrying out their responsibility for grain production. Local leaders prevented farmland from being left idle, demanded that crops be planted on idle land, ensured cropland was not diverted to nongrain crops, reclaimed land for agricultural use, and increased farmers' enthusiasm for planting grain crops, the Bureau official explained. The report said 117.6 million hectares of land was planted in grain, up 0.7% from the previous year.  Corn production resumed to its historic steep path of growth after a 5-year interruption. Corn accounted for most of the increase in this year...

China is scouring the countryside to find native seed, animal and fish genetic resources in a national germplasm census according to Economy Daily , a communist party news outlet. The purpose is to protect "family property" and gain self-reliance in crop and animal breeding. "Excellent" plant and animal resources will be protected on company-run farms if they are in danger of extinction or turned over to Chinese seed and breeding companies to exploit their commercial potential to propel Chinese seed companies as global competitors.  Improvement of China's seed industry is one of the national priorities set at last December's planning meeting for economic work this year. The germplasm census launched in March 2021 was one of the activities ordered by this year's "Document Number One" issued by China's central communist party leadership. The germplasm census is expected to be completed in 3 years. The activity is canvassing all Chinese counti...

Just 108 companies now control a fourth of China's swine production capacity, according to a list prepared for a recent swine industry forum . Unpredictable gyrations in China's hog market continue with the influx of big pig farmers, contrary to the expectations of agricultural officials.  Pigs have historically been scattered across millions of backyard pens, sheds, and living rooms in Chinese villages. At the peak of backyard pig-farming, China's 1997 agricultural census counted over 130 million rural households raising pigs--usually one or two at a time--and those small family holdings accounted for 95 percent of the swine inventory.  In recent years a handful of companies have been on a hog-farm construction binge. Their expansion accelerated during a 2014-17 environmental regulatory push that shut down hundreds of thousands of small farms. Then the African swine fever epidemic wiped out millions more of small farms, biosecurity requirements and a new round of subsidi...

The tentacles of subsidies and government aid are entwined with the world's largest hog farmer. China's Muyuan Food Group--an ostensibly private company--has sold more than 31 million swine through October this year. If Muyuan hits the top range of its targeted output of 35-to-45 million head this year--it will come close to matching the entire production of Brazil or Russia.  Last week local communist party authorities in Nanyang City of Henan Province--Muyuan's hometown--issued a document calling for 15 policy measures to support Muyuan with the goal of propelling the company into the Fortune-500 list of the top companies in the world. The policies feature measures that are invisible to outsiders. They include central government transfer payments for hog-producing counties and manure utilization demonstration projects, easing up on land-use planning and environmental assessments, local government loan guarantees, aid for constructing breeding centers, industrial parks, l...

Record snowfall across northern China this week is the latest in a string of unusual weather events in 2021. A report in China Grain Net raises concerns that the heavy snow could impact this year's corn marketing. With northeastern China already under a cold wave, snow began falling November 5 and continued for days. The storm was expected to let up by November 12, with temperatures rising above freezing in parts of Liaoning Province. The snowfall has broken records kept since 1951. The snow comes at the end of the corn harvest and in the early part of the marketing season for the corn crop in northeastern provinces--China's main corn surplus region. Snow and ice have closed down many roads, disrupting transportation of corn from the northeastern provinces to other parts of the country. The prospect of tighter supplies nudged prices upward. The May futures contract for corn on China's Dalian exchange rose 0.7% to RMB2734 per metric ton.  The snow also threatens to degrade ...

China had 1.5-percent growth in consumer prices over the past 12 months according to its October 2021 Consumer Price Index (CPI) report . The U.S. CPI showed 6.2-percent growth over the same period.  The food component of China's CPI was down 2.4 percent over 12 months while its nonfood component was up 2.4 percent. By comparison, the food component of the U.S. CPI was up 5.3%.  Source: China National Bureau of Statistics. The decline in the food component of China's CPI is entirely due to the popping of China's pork price bubble. Pork prices in October were down 44 percent from a year ago. Most Chinese food prices rose by 2 percent or less over the past 12 months. Consumer prices for grain products were up just 0.9 percent. A handful of food items rose more than 5 percent: vegetables by 15.9 percent; eggs by 12.6 percent; fish by 8.3 percent; and edible oil by 6.4 percent.  Energy commodities propelled the rise in consumer prices. The fuel component of China's CPI w...