Dim Sums: Agricultural Markets in China

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...