China struggles with "high standard" farmland upgrades

China's latest plan to upgrade the quality of its farmland was announced by China's Xinhua News Agency March 30, 2025. The new target is to create 1.35 billion mu (90 million hectares) of "high standard farmland" by 2030. (China's total amount of arable land is 1.93 billion mu, or 128.6 million hectares.)

The new plan implements a decree issued in the 2023 "Document No. 1" that all "permanent basic farmland" be converted to high standard farmland. The 2024 and 2025 "Documents No. 1" also included paragraphs directing officials to build high standard farmland.

The "high standard farmland" initiative aims to overhaul village-wide parcels of land by leveling fields, consolidating fragmented plots, installing drainage ditches, wells, irrigation pipes, access roads, and electric lines to make fields more productive, resistant to droughts and flooding, and accessible for farm machinery. The goal of the initiative is to raise the land's production capacity as a national food security measure. 

"Permanent basic farmland" is a zoning scheme that designates cropland in certain areas that must be used to produce grain or other important agricultural products and cannot be diverted to other uses. China's 2019 land survey found 1.546 billion mu (103 million hectares) was classified as permanent basic farmland.

China's high-standard field initiative is not new. It began with a pilot program about 15 years ago that built on the "comprehensive agricultural development" program begun in the 1990s. The initiative has gained prominence as Xi Jinping prioritized national food security.

In 2019 China's State Council set a target of creating 800 million mu of high standard farmland by 2022. Officials claimed they had met this target by 2020, with land productivity improvements of 10%-20% attributed to the program.

A plan for 2021-2030 targeted 1.075 billion mu by 2025 and 1.2 billion mu for 2030, with unspecified further increases in high standard fields by 2035. That plan claimed that it would raise China's grain production capacity to 600 million metric tons annually and raise grain self-sufficiency to 90 percent. 

China's farmland is on a kind of treadmill as previously upgraded farmland has to go through new upgrades to address degraded quality or poor construction of earlier upgrades. Worsening problems are reflected by directives in the "Document No. 1" in the last two years to utilize salinized or alkali farmland and to manage erosion gullies in black soil of the northeast and acidified land in southern regions.

A 2023 article from China's Land Science and Technology Institute sounded an alarm about "hidden risks" for China's farmland quality. Concerns were based mostly on findings from China's 2019 national land survey: 

• Farmland in northern regions had expanded by 101 million mu (6.73 million hectares) in 3 years, mainly by converting grassland, wetlands and other environmentally fragile land to agriculture. 
• 63 million mu (4.2 million hectares) of farmland--mainly in the mountainous southwest and loess plateau of the northwest--was on steep slopes of 25 degrees or more. Much of this land was at risk of being abandoned due to remote locations and poor infrastructure. 
• Large swathes of permanent basic farmland were planted in fruit trees or used for nonfarm purposes. 
• The survey highlighted a trend of shifting land from rice paddies to crops that don't need irrigation.
• Multiple cropping (2 or more crops per year grown on the land) is in decline. The proportion of land used for only one crop grew from 40.37 percent to 47.9 percent during 2009-2019. 
• Soil depth was shrinking. The soil depth was generally 12-15 cm, and 71.24 percent of soil was less than 20 cm deep.
• Surface water pollution worsened--more than 40 percent of water quality monitoring points in the Hai and Liao rivers of northern China had water quality of grade 4, 5 or worse.
• The area suffering from declining groundwater expanded northward from the region of the Huang and Hai Rivers regions to eastern Inner Mongolia and the northeastern region.

Many articles have criticized the high standard farmland initiative. For example, a 2023 post on social media warned that land in many such projects ended up abandoned because local officials just went through the motions when building such projects. Farmers often did not grasp the technology or equipment supplied by the government and follow-up management and monitoring is often lacking after rudimentary projects are built. 

An investigation of one high standard farmland project found many irrigation pumps were
solid concrete blocks with a pipe attached. Source: The Paper.

A May 2024 article in a periodical on "Approaches to high standard farmland construction in the new era and persisting problems" by Ministry of Agriculture and Rural Affairs analysts praised the "remarkable results" of the State Council's 2019 billion-mu high standard farmland target, but it focused on problems that make China's farmland an "unstable foundation for national food security": 

• In 2022 the central government budgeted 100 billion yuan for aid, equal to 1000-to-1150 yuan per mu (about $2,140 to $2465 per hectare) for high standard field projects. The authors worried that low funding led to poor quality construction.
• Local officials had chosen sites where construction was easy in order to fulfill their high standard farmland quotas, while hilly areas and those lacking access to irrigation were often neglected because construction was more difficult and costly.
• Maintenance of high standard farmland projects was neglected, so ditches were clogged, pipes broke, and roads cracked.

An October 2024 article in Chinese news outlet Yicai reported that Chinese Government auditors found numerous problems with high standard farmland projects in a dozen provinces: 

• Non-grain crops were planted on some high standard farmland, 
• Some high standard fields were built on land not classified as farmland or on land that doesn't exist
• Facilities were never completed in some projects, and work progress was falsified in some instances. Some projects classified as complete were not in operation.
• Roads were cracked and irrigation equipment was missing, and equipment was not operational in others
• No hydrological survey was done before drilling wells
• In some counties high standard farmland was idle, had garbage dumped on it, or was covered in fish ponds.
• Funds were never paid for some projects while in others the companies were overpaid 
• bidding procedures were suspect in some projects

The latest plan includes many specific provisions that appear to be meant to address many of these problems. It includes suggestions to bulldoze land to flatten it, deepen the soil layer by trucking in soil from elsewhere, engineering banks, reducing slopes, planting trees to prevent wind erosion and intrusion of sand, and adopting improved conservation measures. The plan warns against building farmland on ecologically fragile areas such as tidal flats, steeply sloped land, and land that has been returned to grassland, forest, lakes and pastures. 

The new plan offers different strategies for 7 regions of the country. For example, the northeastern region will focus on improving irrigation and drainage and black soil protection; the lower Yangtze River region will manage drought while also preventing waterlogging; southern coastal provinces will address fragmentation of plots and protecting land from heavy rains in an area regularly hit by typhoons; terraced fields, roads and water delivery facilities will be the focus in southwestern provinces; and in the northwest vulnerability to drought will be a focus.

The new plan implies that the high standard land may be diverted from peasant farmers to scaled-up operations run by companies or farmers with more expertise when it recommends use of information technology to integrate water and fertilizer application, intelligent irrigation, automatic monitoring of soil moisture and insect populations, and use of "smart" meteorological services. 

The new plan calls for improvements in efficiency in a program that involves 5 ministries and 4 levels of government and multiple approvals. Authorities will strengthen supervision, correct delays in funding, stop embezzlement, and investigate and punish those responsible for cutting corners, engineering fraud, and illegal bidding behavior. Companies and individuals will be excluded from the projects if they have a record of legal violations or lack qualifications. 

In Suining, Sichuan Province farmers said canals broke, farmers could not climb onto the ridges, and equipment could not reach fields. An agricultural bureau official was accused of taking 4 million yuan in bribes. Source: Global Times.

The plan says it is strictly forbidden to discharge, dump or store sewage, garbage or industrial waste on farmland. 

The plan says local governments have the main responsibility to finance high standard land projects. The plan gives them permission to raise funds through issuing bonds to supplement central government funds and company investments, and it encourages banks to make loans for the projects. However, many local governments probably lack the finances. The plan includes a proviso that funding for high standard farmland must not increase the "hidden debts of local governments."

China keeps finding more farmland

China had 128.6 million hectares of arable land in 2023 according to the Ministry of Natural Resources' Communique on Natural Resources released last week. That was a 1-million-hectare increase from the previous year's value published in the China Statistical Yearbook.

In contrast, the area sown in crops dropped by about 1 million hectares to 169 million hectares in 2023, seemingly in conflict with the increase in cultivated land area reported by the Ministry of Land Resources. The area sown to crops had peaked at nearly 170 million hectares in 2022. 

The area sown to crops in China exceeds the cultivated area because some land is planted intensively by planting 2 or 3 crops each year on the same field. (In contrast, the amount of harvested crop area in the United States is substantially less than the total area of cropland because a substantial amount of U.S. land is left fallow or put into conservation uses.) There is no explanation for why the rising trend in sown area bears little correspondence to the up-and-down jumps in the cultivated land statistics after various surveys.

Compiled from China Statistical Yearbooks, censuses and communiques.

China's statisticians improbably keep finding more farmland despite having covered the country with vast housing developments, industrial parks, town squares, highways, railroad tracks--and in recent years scenic parks and lakes. Between 2008 and 2023 the area sown to crops in China somehow increased by 12.7 million hectares. Over that time period, USDA data show that U.S. cropland area decreased by about 10 million hectares.

According to the UN's FAOSTAT database China has the third-largest area of cropland after India and the United States. China's crop area is slightly larger than Russia's and almost twice as large as Brazil's cropland area. Yet China is the world's largest importer of agricultural products. Brazil and the United States are largest suppliers of China's agricultural imports. 

Source: FAOSTAT database.

Chinese leaders worry that loss of farmland will threaten national food security, so strict rules for preventing decline in cropland and pledges to improve its quality are the first two elements of China's food security policy. Statisticians are surely expected to report success in maintaining or even expanding the farmland base. The Natural Resources Communique describes its statistics as "a great report card to society" on the utilization and protection of resources.

Elsewhere in the communique it was revealed that 85,700 hectares of cultivated land were requisitioned for construction projects during 2024, suggesting that farmland is still being gobbled up. The communique emphasized that the pace of farmland loss had slowed: the 85,700 hectares was 32-percent less than the year before. The communique's authors attributed the slower loss of farmland to strict land use planning, but it may actually have been due to the implosion of China's real estate sector.

Cultivated land accounts for about 17 percent of China's land uses, according to the Communique on Natural Resources. Orchards, tea and other permanent crops add another 2 percent. According to the communique, residential, industrial, and mining account for just 5 percent of land use and transportation infrastructure accounts for 1 percent. Forests account for 35% and grasslands and pasture account for 33%. 

Based on data reported in China's 2024 Communique on Natural Resources.

The sensitivity of farmland statistics is reflected by a paragraph in the communique highlighting policy directives to prevent farmland from being diverted to other uses, to improve the quality of the limited amount of cultivated land, and to improve the system for offsetting requisitions of farmland with additions of new farmland. An agriculture ministry circular calls for a "cultivated land balance" management system of adding new cropland before allowing any use of cropland for nonagricultural use or planting of forests, fruit trees or tea bushes.

The communique also highlighted China's new push to industrialize forests and oceans. The communique reported that China's GDP from maritime activities accounted for 7.8 percent of its gross domestic product in 2024. The output of the forestry industry was said to grow 9.6 percent. Not mentioned in the communique are recent initiatives to obtain edible oil from tree crops, plant nut and fruit trees in mountain villages, and expand marine aquaculture. 

The communique and other recent documents also highlighted a Xi Jinping pet project to overhaul village-level land use, build infrastructure and beautify villages (launched while Xi governed Zhejiang Province 22 years ago) with the puzzling name of "1,000-10,000 project". The communique said over 670 billion yuan was spent on a pilot program that reconfigured the layout of villages, added 44,000 hectares of farmland and reduced land used for industry and commercial use by 10,700 hectares.

While the statistics suggest China has huge grassland resources, much of it is degraded. The communique lauds a 32-billion-yuan program to push back against desertification, highlighting a program to contain the expansion of the Taklimakan Desert in Xinjiang.

Fur Farms, Carcasses, Leaky Supply Chains & Soymeal Substitutes in China

China is cracking down on a black market for fur animal carcasses by turning them into animal feed ingredients. A pilot program was proposed by agricultural officials as part of an initiative to create substitutes for soybean meal in animal feed. Two years later the situation on the ground doesn't look much like the nice, neat program designed by agricultural officials.

Shanghai news publication The Paper posted a video of a “shadow visit" to expose a black market for carcasses of foxes and raccoon dogs raised for their fur (full text version here). The 34-minute video showed lines of outdoor metal cages holding foxes and raccoon dogs on muddy ground covered with feces, warehouses piled with skinned carcasses, bags of fox and raccoon dog legs prepared for shipment to southern China, and a rudimentary oil refining shed where fat from carcasses is mixed into oil used in animal feed. 

screenshot from video by The Paper

The video focused on fraudulent sale of fox and raccoon dog carcasses as meat from sheep, dogs, rabbits and hind quarters used as beef jerky. Chinese standards do not allow foxes, raccoons, or mink to be used as food or animal feed. A Ministry of Agriculture and Rural Affairs (MARA) official claimed that strict regulation prevents carcasses of fur animals from entering the food supply.

The video was posted on China's March 15 consumer day when state media reveal revolting food safety practices. This video displayed bags of fox and raccoon dog meat and piles of skinned carcasses sold to traders who pass it on to rural tourism operations, restaurants and street hawkers offering rustic food with strong flavor, including braised, stewed, and barbecued meat. One butcher openly advertises on an online platform "fresh raccoon dog meat, accepting large orders, shipping nationwide." 

A report issued by China's Leather Association said China produced 10.76 million skinned carcasses of farmed minks, foxes and raccoon dogs in 2024. (In comparison, China slaughters about 700 million pigs and billions of poultry annually.) Presumably the fur is used in luxury apparel, calligraphy brushes and other products that use animal hair. Most of the farm-raised foxes and raccoon dogs are in 2 northern provinces of Shandong and Hebei. The journalists' investigation focused on localities where production is concentrated: Tangshan of Hebei Province and Linyi and Weifang districts of Shandong Province. 

Tangshan is the main source of illegal raccoon dog meat commerce. In Tangshan farmers electrocute the animals, skin them on the spot and deliver the skins to brokers who visit the farms. The carcasses are stored in warehouses and sold to other merchants who sell them for meat.

screen shot of raccoon dog carcasses from The Paper video.

The fur-animal meat trade has been suppressed in the Shandong districts of Weifang and Linyi. News media have previously exposed the illicit meat trade there and local authorities are said to very strict. Hyper-competitive meat butchers also watch each other and turn in their competitors if they suspect they are butchering fur animals. 

In Linyi and Weifang fox carcasses are illicitly used as animal feed ingredients. After skinning, the carcasses are bought by traders who deliver them to hidden workshops that extract the fat, then mix it with fat from chickens, ducks, and pigs for use by animal feed mills. The fur animals cannot be used in feed either but mills seldom test the fat.

The government subsidizes disposal facilities to grind up the carcasses. According to a broker in Weifang dealers collude with the facilities to secretly buy up carcasses to use for fat extraction. 

China's fur ranches are concentrated in Tangshan, Linyi, and Weifang
districts in Hebei and Shandong Provinces. 

Two years ago, Chinese agricultural officials decided to begin a pilot program to legalize the use of fur-animal carcasses for feed. The program was introduced under the guise of China's efforts to cut reliance on soybean imports. In April 2023 the Ministry of Agriculture and Rural Affairs (MARA) issued a plan to reduce the proportion of soybean meal in animal feed that included pilot programs to utilize fur animal carcasses as a protein source in animal feed in Hebei, Shandong, and Liaoning Provinces.

Shandong announced its pilot program in January 2024 to be implemented in Linyi, the province's main fur-animal production site. The 3-year plan aimed to use 20,000 metric tons of fur animal carcasses to produce 4,000 tons of fat and 8,000 tons of meat and bone meal that could replace soybean meal and fish meal in animal feed. 

The pilot program promised to set up a controlled "closed loop" supply chain that begins and ends at farms where foxes and raccoon dogs are raised. Only designated companies would have the right to acquire the carcasses where the animals are skinned, transport, store and process them, and then return the feed products to feed fur animals. No carcasses could leak out of the system for other uses, and feed products could not be used for other animals. Everything would be monitored by video to ensure compliance. The pilot designated 3 companies to monopolize the collection, storage, transportation and processing of carcasses into fat and meat and bone meal for use exclusively in feed for local fur animals. Two companies were designated to grind up diseased carcasses into fertilizer and to use fat in biodiesel and cosmetics. 

A year into the 3-year pilot the journalists' investigation in Linyi found that implementation did not correspond to what had been promised. Linyi Liyuan Bioenergy Co. was still building a processing plant to be used for fur animal meat and bone meal, and the reporters found no equipment in the building. The address of the company responsible for grinding up diseased and spoiled carcasses was a village; the facility was actually several kilometers from its listed address. 

A designated feed mill's employees were evasive when asked whether fox carcasses from Linyi are marketed to other customers besides the pilot project's designated companies. A staff member asked how the reporter knew about the pilot project and insisted that the feed company was only a "small link" and "just helping out." He refused to say how much feed was produced for the pilot project in the previous year and refused to answer questions about processing fees.

A farmer told the reporters he knew nothing about plans to install video cameras to watch collection points for skins, had never seen anyone install video cameras, and wondered who would pay for such cameras. 

The journalists apparently did not investigate whether promised supervision of the pilot is in place. The pilot program write-up had identified a provincial leadership office for the pilot. Professors and experts were designated by name for a technical guidance team. Policy measures, technical training and problem-solving were supposed to be coordinated.

A document launching a fur animal carcass program in Liaoning Province is on a list of provincial agricultural documents issued in 2023, but no additional information can be found online. There is no indication that Hebei Province launched a pilot.

It is unclear how the pilot program would contribute to the reduction in soybean meal use that was its stated intent. According to the pilot program's background document, fur animals apparently do not consume soy meal. They are fed mainly on fur animal carcass scraps, small fish, and viscera from the local poultry processing industry. The pilot program's feed products were not supposed to be used for other types of animal feed.

Neither the Shandong pilot description nor the journalists' investigation mentioned that production of fur animals has been dropping precipitously since the pandemic. The Leather Association report shows production of foxes peaked in 2018 and production of racoon dogs peaked in 2019. Production of the two species combined plummeted from about 28 million in 2019 to 6.5 million in 2024. The Association identified weak clothing sales, high inventories, and a 60% drop in exports last year as problems for the industry. It is unclear whether facilities and production lines dedicated to fur animals are financially viable when the volume of carcasses is shrinking and unstable from year to year.

"Supply chains" made up of boxes and arrows neatly drawn on paper often morph into a tangled bowl of noodles when implemented on the ground. Digging into a recent exposé of the black market for carcasses of fur animals indicates how assurances of "full traceability," "biosecurity," and "closed loops" can break down when no one is watching and/or the economics don't work. In a worst-case scenario this can lead to disease epidemics and food safety scandals.

China's Corn & Wheat Imports Down 97% From Last Year

China's first customs data for 2025 feature a 97-percent decline in corn and wheat imports from a year earlier. Soybean imports were up slightly by volume (but down in value), and dairy, pork, poultry, and seafood imports rebounded year-on-year. Life was less sweet in China with a 93.7% decline in sugar imports, and drinking appears to be up as wine and beer imports posted gains.  

China's agricultural imports for January-February 2025 were down 14.7 percent from a year earlier. The value of farm and food goods imported for the first two months of 2025 totaled $30.7 billion, down $5.26 billion from the same period in 2024. China's exports of agricultural products during January-February totaled $15.2 billion, up $393 million from a year earlier. 

Data from China Customs Administration website.

As usual, soybeans were the largest component of China's agricultural imports during January-February 2025 with a value of $6.3 billion. Meat imports were valued at $4.1 billion, fruit and nuts $3.8 billion, seafood $3.3 billion, and dairy products $2.1 billion. Cereal grain imports were valued at just $1 billion during January-February. 

Data from China Customs Administration website.

Grains and soybeans accounted for most of the decline in the value of agricultural imports. January-February cereal grain imports were down $3 billion (-75%) from a year earlier. Soybean imports were down $1.14 billion (-15.3%, due to declining prices), and sugar imports were down $681 million (-93.7%). 

The value of dairy imports was up 19% year-on-year, value of imports of pork and pork offal was up 10.9%, poultry imports were up 15.5%, and seafood imports were up 5.2%. Wine imports were up 54% and beer imports were up 14.2% in the first two months of 2025. 

The quantity of cereal grain imports during January-February 2025 was down by 9.9 million metric tons, a 74.3% decrease from a year earlier. Corn and wheat imports combined totaled just 290,000 metric tons, down 97% from a year earlier. 

Corn imports were down 6 million metric tons (-97.1%) and wheat imports were down 2.39 mmt (-95.6%). Barley imports were down 1 mmt (-37.6%), and sorghum imports were down 600,000 metric tons (-37.5%) year-on-year. Soybean imports of 13.92 mmt during January-February 2025, were up 4.4% from a year earlier. 

The data for these two months was posted on the website of China's Administration of Customs on March 18. Year-on-year analysis is displayed for the two months combined to avoid distortions due to timing of the lunar new year.

China Caps Grain Imports to Stop Slide in Prices

A clamp-down on China's grain imports since last year has more to do with Chinese officials' anxiety about low grain prices than trade war posturing. Officials in China worry that low prices could undercut two of this year's goals for rural policy. Low prices could erode production incentives ahead of spring planting--resulting in a decline in grain output--and lead to a recurrence of rural poverty--which Xi Jinping claimed to have conquered 5 years ago. 

An article last week in Farmers Daily--the communist party's mouthpiece on farm issues--described how Chinese authorities are coordinating a clamp-down on grain imports with domestic market interventions to boost grain prices. All the elements in the article matched paragraph 7 in the party's "Central Document No. 1" section on agricultural supply management without referring to the document.

Farmers Daily celebrated a sharp drop in grain imports that began last summer. After tailing off during the first half of 2024, China's corn imports fell abruptly in August-December to their lowest volumes in years. The cumulative 1.58 mmt of corn China imported during August to December 2024 was just a small fraction of the 13.4 mmt imported during the same months of 2023.  

Source: analysis of Chinese Customs Administration data.

China's wheat imports also dropped last August. Wheat imports were on a healthy pace of about 1.8-to-1.9 mmt per month during February-May 2024. Then imports dropped off during the June-August marketing season for China's winter wheat harvest and dropped even lower during August-December. Cumulative wheat imports during August-December 2024 were 68 percent less than their year-earlier volume.

Source: analysis of Chinese Customs Administration data.

Soybean imports displayed a different pattern. Imports of genetically modified soybeans (used for crushing) were 104 mmt in 2024, up from 97 mmt in 2023. Imports of non-GMO soybeans (which compete directly with domestic non-GMO Chinese soybeans for use in food products) plummeted last year. Non-GMO soybean imports totaled 928,000 metric tons in 2024, down from 1.7 mmt in 2023. 

 

Preliminary data for January-February 2025 show imports of grain and soybeans combined were down 35% from their year-earlier volume in the first two months of this year. Soybean imports during January-February 2025 were up 4.4% year-on-year.

 
Farmers Daily predicted that the falling trend in wheat and corn imports will continue in the first quarter of 2025. The article cited USDA's downward revisions of its forecasts of China's grain imports over the last 3 months to support its prediction. Farmers Daily anticipates that China's grain market supply and demand will be tight, market price expectations will improve, and grain prices will continue to recover. 

Farmers Daily blamed "profit-seeking non-essential imports" for driving down Chinese grain prices and suppressing farmers' incomes. The chart below shows that Chinese corn prices dropped dramatically after the 2023 harvest. Farmers Daily claims the reduction of "non-essential" imports restored "balance" and "normal operations" to the grain market. Nevertheless, prices dropped again after the September 2024 harvest despite the clamp-down on imports suggesting an excess supply of domestic corn. Authorities may have been alarmed when the procurement price fell below RMB 2000, a level not seen in 5 years. Chinese corn prices finally turned up slightly in February 2025 as authorities took measures to sop up excess grain supplies in the domestic market after they had pared back imports. 

Weekly data from China's Administration of Food and Commodity Reserves

Prices for domestically grown soybeans have followed a broadly similar path to the corn price. The decline in soybean prices began in 2022 and the decline in price after the 2024 soybean harvest was steeper. Domestic soybeans have also seen a modest rebound since February 2025.

Weekly data from China's Administration of Food and Commodity Reserves

Farmers Daily cheered on the Chinese government's market interventions to deal with the "excessive decline in grain prices": enforcing minimum prices for rice and wheat and buying up corn and soybeans for government reserves. 

A March 7 article by China Grain Net (linked to Sinograin, China's grain reserve company) credited Sinograin's increase in prices it pays to procure corn for the broader boost in corn market prices. Sinograin procured 223,000 metric tons of corn during the final week of February and 314,000 metric tons in the first week of March (but these amounts were only half the amount targeted). A follow-up article said procurement was boosted to 410,000 metric tons in the 2nd week of March (less than half the record-high target of 973,000 metric tons set for that week). 

On March 17 the agriculture ministry reiterated a pledge made in this year's "Document No. 1" to continue implementing grain and soybean subsidy policies to keep prices "at a reasonable level," keep farmers net returns steady, and to strengthen farmers' incentives as planting proceeds during the spring season. Specific goals for policy support are to consolidate the expansion of soybean acreage in recent years and keep grain production at 700 million metric tons.

Divergence in U.S. & Chinese egg prices

High egg prices are a hot topic in the United States. China, in contrast, has a glut of eggs and depressed prices. 

The March 14, 2025 USDA Agricultural Marketing Service weekly eggs market overview reported that U.S. egg prices continued declining during the second week of March as the supply situation improved. No significant highly pathogenic avian influenza (HPAI) outbreaks have occurred in March and U.S. egg demand is relatively light. The average U.S. wholesale price for Grade A large white eggs was $4.15 per dozen, down sharply from their February peak. 

Until 2021, Chinese and U.S. wholesale egg prices had been roughly equal at about $1-to-$2 per dozen with no trend. U.S. prices fluctuated more than Chinese prices, so the U.S. price was sometimes higher, sometimes lower than the Chinese price after converting them to dollars per dozen. 

Chinese prices converted using monthly exchange rate and assuming 0.6 kg per dozen.
Sources: USDA and China Ministry of Agriculture and Rural Affairs. 

Since 2022 HPAI outbreaks and hen culls have caused spikes in U.S. egg prices and divergence between U.S. and Chinese egg prices. China's weaker regulatory requirements and preponderance of small-scale farms with low capital requirements are probably the reasons for China's elastic egg supply and continued lower degree of fluctuation in China's egg prices. Declines in feed prices during 2023 and 2024 also contributed to lower Chinese egg prices.

U.S. egg prices dropped in 2023 as the industry recovered from its 2022 HPAI outbreak. U.S. and Chinese egg prices were briefly at parity again in May 2023 at about $1 per dozen. 

Then the latest HPAI outbreak caused the U.S. egg price to spike again in 2024, eventually reaching the February 2025 peak of $7.82 per dozen. 

Chinese egg prices were in decline during the U.S. egg price spike. After hitting a modest peak of $1.17 per dozen in November 2022, Chinese egg prices went through modest peaks and valleys but were generally in the doldrums. The average wholesale egg price announced by China's Ministry of Agriculture and Rural Affairs for the first week of March 2025 was equal to about $0.85 per dozen, down more than 30 cents from November 2022. 

Egg prices are even lower in major production areas of northern China. According to www.beijingprice.cn the average wholesale price in Beijing on March 15 is $0.54 per dozen, while the average price in wet markets was $0.73, and the supermarket price was $0.83.

Beijing's Xinfadi wholesale market reported a 25-to-30-percent drop in egg prices in early February when sales resumed after the lunar new year holiday. Prices rebounded slightly when school cafeterias reopened later in February, but a report from the market said prices are still relatively low. The report attributed weak prices to an influx of million-hen egg farms in nearby Hebei Province. Despite declining feed prices recently lowering the floor under egg prices, analysts said current prices are below breakeven for Chinese egg producers.

Chinese prices converted using monthly exchange rate and assuming 0.6 kg per dozen.
Source: www.xinfadi.com.cn price quotations

The Chinese market's ability to absorb supplies will become even weaker as the weather warms in the spring and refrigeration becomes necessary to preserve eggs, so analysts see continued weak egg prices on the horizon in the Beijing market. 

Don't get any ideas about exporting Chinese eggs to the United States to take advantage of the spread between U.S. and Chinese prices. Chinese eggs are not approved for import to the United States since China has its own disease problems, and its food safety standards cannot meet U.S. requirements. According to China's customs data, nearly all of China's exports of fresh eggs during 2024 (just under 140,000 metric tons) went to Hong Kong and Macao with small amounts going to Myanmar and Tuvalu. None were exported to the United States. China does not import fresh eggs.

Foreign Investment Difficulties for Chinese Agribusinesses

At a symposium on agricultural foreign investment held by China's Ministry of Agriculture and Rural Affairs (MARA) this week companies complained about financing difficulties, limited market access, and lack of information about laws, policies and market environments in target countries. 

The meeting was attended by representatives of 42 Chinese companies engaged in seed, livestock, fishing, and crop production, as well as officials from powerful government organizations such as the National Development and Reform Commission, Ministry of Commerce, the Foreign Ministry, and various MARA offices and government-affiliated units. Presentations by state-owned grain trader COFCO and seed producer Zhongnongfa Seed Group discussing their experiences and difficulties were featured. 

According to MARA's description of the meeting, agricultural enterprises have overcome difficulties in recent years and played an important role in building China's "Belt and Road", building a new type of international relations, and ensuring China's supplies of grain and other important agricultural products. However, MARA said "going global" has become more complicated in the current agricultural situation.

The meeting called for a wider array of policies to support foreign agricultural investors to nurture China's own multinational companies and deeply integrate companies into supply chains in order to revitalize rural areas and build China into an agricultural power. 

Financing seemed to be the most prominent policy issue. The meeting recommended creation of a platform to link up prospective investors with banks, and it encouraged financial institutions to offer individualized financial and service products to agricultural companies investing abroad. Better communication between ministries--presumably foreign ministry organizations communicating investment or foreign aid opportunities to the agriculture ministry--was also recommended.

A related meeting on agricultural science and technology parks in Central Asia was also held this week. The meeting discussed examples of agricultural scientists from Shaanxi Province's Northwest Agriculture and Forestry Science and Technology University adapting improved Chinese varieties and techniques for use in Kyrgyzstan, Kazakhstan, and Uzbekistan. These included 

• experiments with adapting apple rootstock to survive cold winters at a 10-hectare demonstration park in a so-called "science city" Kyrgyzstan
• introduction of wheat varieties, wide-furrow seeding, and salinized soil management in Kazakhstan
• testing of solar-powered drip irrigation equipment on 6.7 hectare of wheat and cotton in Uzbekistan

China has built a series of agricultural demonstration parks in Central Asia during 2017-18 where universities are responsible for introducing and adapting technologies while companies will be expected to commercialize the seeds, equipment and technical services.

Agriculture Chatter at China's "2 Sessions"

Discussion of agriculture has not been prominent at China's "two sessions" this week. The emphases were on raising money for stimulus through bond issues, boosting lending by state banks, stimulating consumption, supporting advanced industries (biological manufacturing, quantum technology, 6G, AI+), addressing local government financial problems, solving the property market crisis, "green development," private enterprises, and higher education.

In his "Minister's Channel" press conference discourse on food security, Minister of Agriculture and Rural Affairs Han Jun reported that China had produced more than 700 million metric tons of grain last year despite drought and typhoons. Minister Han went on to stress the importance of raising yields through science and technology and implementing policies to ensure grain is profitable and prices are reasonable. He noted that grain supply and demand is overall in tight balance, but China has a persisting deficit in feed grains while having achieved self-sufficiency in staple food grains rice and wheat. Han blamed last year's weak demand and big imports for depressed farm prices. He said government departments are intervening in the market by buying up grain for reserves and "adjusting" imports and exports.

Minister of Agriculture and Rural Affairs Han Jun speaks
at a "2 sessions" press conference Source: Farmers Daily.

China Feed Information Net highlighted comments by feed and livestock company executives at the Chinese Peoples Consultative Committee (CPCC). 

Liu Yonghao, founder and CEO of New Hope Group--a leading producer of feed, pigs, poultry, and milk--and Qin Yinglin, CEO of Muyuan Group--China's largest pig-farming company--echoed the science and technology theme. Liu noted the strategic importance of improving China's livestock and poultry breeding system to improve the core competitiveness of the industry and called it "a top issue" for agriculture. Muyuan's Qin cited the importance of promoting intelligent development of the pig farming industry and called for building a scientific breeding system. 

At the National Peoples Congress (NPC) a county-level official from Heilongjiang Province raised concerns about the plight of China's high-end beef cattle industry. He pointed to the weak breeding system and reliance on imports for basic genetic material as problems that need to be addressed to bring down production costs. 

The CEO of a poultry company in Hunan Province cited an apparent contradiction between the detection of chloramphenicol in national food safety testing while he claimed that no chloramphenicol-based veterinary drugs are sold on the market. He claimed that food contaminants are introduced throughout the supply chain, and businesses like his are unfairly hurt by detection of food safety hazards. He called for more clarity of responsibilities, more rigor in sampling of food for testing, and insisted that production enterprises should not be required to prove their innocence.

A village party official in Henan Province told the NPC that policy banks should make more loans to support the agricultural industry, improving connections between banks and industries, streamlining the loan process, and setting quotas to ensure that funds actually flow to agriculture. 

The Party Secretary of China Agricultural University jumped on the theme of improvements in higher education at the CPCC to request "urgent" support for agricultural professors, improvements in the evaluation system for professors, and stable support for young faculty. He recommended collaboration with foreign institutions but also called for Chinese agricultural universities to raise their international profile to create a "Chinese brand" of international cooperation and to promote Chinese-style higher education in agriculture worldwide.

Not to be outdone, a dean from Sichuan University demanded investment to create leading agricultural universities in China's western provinces. He called for constructing major platforms for biological breeding to create self-reliance and self-improvement in the field.

China's Grain Procurement Doubles in One Year

China reported that 308.8 million metric tons (mmt) of last fall's grain crop had been procured as of the end of February 2025. This is more than twice the amount procured a year earlier. The announcement in State media did not mention the huge increase nor explain how such an unprecedented increase in grain procurement was achieved. 

Economic Daily reported that procurement by all types of enterprises included 105 mmt of rice, 190 mmt of corn, and 10 mmt of soybeans. 

The State Administration of Food and Commodity Reserves reported only the total procurement of 308.79 mmt of fall grain with no data for individual grains except mentioning that 7.11 mmt of middle and late rice was procured through the minimum price program. 

In past years the Administration regularly reported procurement progress statistics for each type of fall grain from October through April 30 on a monthly or 10-day interval. But this year only 3 monthly reports have been posted at the end of December, January and February with no detail on procurement of each grain. 

Comparison with Fall grain procurement reports from the previous 3 Februarys shows that this year's procurement volume as of February is twice as large as in previous years. This year's procurement through February exceeds fall grain procurement for the entire season last year (200 mmt).

Source: data compiled from China's State Administration of Food and Commodity Reserves web site.

China's National Bureau of Statistics reported an 11-mmt increase in the fall grain harvest in 2024 over the previous year, but this increase does not account for the huge 150-mmt increase in procurement.

Summer grain procurement reports are issued from June through September 30. Last September the Food Reserve Administration reported that 75 mmt of summer grain had been procured from the 2024 crop. This was up 6.4 mmt from the previous year's 68.6 mmt, a more plausible increase. 

The Economic Daily announcement seems aimed at encouraging farmers to continue planting grain for next fall's crop as they face weak prices with spring planting approaching. Economic Daily commented that procurement is proceeding smoothly, in an orderly manner, and prices are rising steadily. The article highlighted the government's purchases of 7% of the fall rice harvest at the minimum price set by the government in order to stabilize prices and recent increases in corn prices.

The procurement volumes reported in past years appeared to be inconsistent with China's production data. For example, the 200 mmt procured during last year's procurement season was only 38% of the fall grain harvest. It is unlikely that more than 60 percent of grain remains on farms. The purchases are by all kinds of grain enterprises (各类粮食企业). Perhaps the statistical system found a way to account for purchases by itinerant traders who cruise villages purchasing grain by the truckload who had failed to report in previous years. 

Expanded list of U.S. goods hit with 10% tariffs

China's official list of U.S. agricultural products subject to 10-percent additional tariffs announced March 4, 2025 is much broader than reported in yesterday's post on this blog. The list of products targeted for 15-percent tariffs is unchanged. Tariffs will go into effect March 10, 2025, according to the announcement.

The 10-percent tariff product list includes 711 tariff lines that cover most major U.S. agricultural exports to China. In addition to the soybeans, sorghum, beef, pork, and offal reported yesterday, additional 10-percent tariffs will be applied to fish and seafood (fresh, frozen, and processed products), most dairy products, vegetables, fruit, nuts, potato flour, fish oil, and processed nuts, fruits and vegetables.

The 10-percent tariff list does not include whey, alfalfa, peanuts, vegetable oils, grass seed, vegetable seeds, live plants and flowers, live animals, turkey, guinea hens, lamb, ginseng, honey, pet food, distillers grains, fish meal, or leaf tobacco. Also excluded are food ingredients, lactose and other sweeteners, confections, chocolate, coffee, tea, spices, malt extract, infant food, wine, beer, and whiskey.

Goods shipped from the place of departure before March 10, 2025, and imported between March 10, 2025 and April 12, 2025, will not be subject to the additional tariffs. 

China's General Administration of Customs also announced March 4 it is suspending imports of soybeans by 3 trading companies (CHS, Inc., Louis Dreyfuss, EGT LLC) due to detection of ergot fungus and seed coatings on soybeans imported from the United States during recent inspections. The suspension takes effect immediately.

China's Customs authority is also suspending imports of U.S. logs due to detection of forest pests such as bark beetles and longhorn beetles in logs imported from the United States.

China Sends Ag Minister to Uruguay Inauguration

China sent its agriculture minister to the inauguration of Uruguay's President Yamandú Orsi in Montevideo. Why would China send its agriculture minister--in office for less than a year--to the inauguration of an important Latin American ally?

According to State media, Minister of Agriculture and Rural Affairs Han Jun was appointed as Xi Jinping's special envoy to the March 1 inauguration. Minister Han met with President Orsi at the presidential palace to convey greetings and best wishes from China's leader.

(The Uruguay trip explains why Minister Han was absent from a prominent meeting to discuss China's seed industry held the same day as the inauguration.)

President Trump chose Alabama Senator Katie Britt to attend the inauguration. Several South American countries sent their presidents, as did Armenia. Germany sent its low-profile president Frank-Walter Steinmeier.

Minister Han Jun

Senator Katie Britt

Orsi has promised a leftward shift from previous President Luis Lacalle Pouin, a shift that seems favorable to China's Latin American ambitions. Uruguay's political shift is similar President Lula Da Silva's return to power in neighboring Brazil which warmed relations with the Middle Kingdom.

China has been pushing for a trade deal with Uruguay since 2021 and made a concerted effort to draw Uruguay into its "Belt and Road" sphere in 2023. Lula apparently did not attend the inauguration, but Da Silva just invited Uruguay's new president to attend the China-dominated BRICS summit in Rio de Janeiro coming up in July.

Maybe Minister Han was the only official available for the trip, or maybe he was the only one Xi thought he could trust. But the importance of agriculture in Uruguay seems to be a logical explanation for choosing Minister Han to represent China at the inauguration. 

Uruguay has become a significant exporter of food to China. In 2024 China's imported $2 billion worth of farm products from Uruguay, but nearly all of it was composed of beef and soybeans. China's $892 million of meat imports was composed mainly of beef, plus $14 million of lamb. Imports of soybeans were over $1 billion. Uruguay is the 4th-ranked supplier of China's beef and soybean imports and supplies roughly 9%-14% of China's imported beef and just 2% of China's imported soybeans.

Harmonized system codes 02-24.
From China Customs Administration web site.

However, China's agricultural imports from Uruguay are not exactly booming. China's imports of Uruguayan beef were on a steep growth path until 2022 when their value peaked at $1.9 billion. China's beef purchases from Uruguay plummeted to $870 million in 2024. A Uruguayan exporter was one of 7 beef companies suspended by China Customs yesterday.

China Customs Administration data.

China's imports of soybeans from Uruguay have bounced between $500,000 and $1 billion in most years since 2015, peaking at $1.27 billion in 2022. China reported no soybean imports from Uruguay in 2023, apparently due to drought in the South American country. There is a history of quality issues including excessive moisture and high temperature in soybean shipments from Uruguay to China, addressed by a 2017 bilateral agreement. But last fall there were reports that private terminals were preventing external inspectors from checking vessels.

In relations with "Belt and Road" countries China's agriculture ministry is mainly involved in offering technical assistance and coordinating outbound Chinese agribusiness investment. It would appear China has little to offer Uruguay in assistance to beef or soybean growers in Uruguay since China does poorly in growing both of these commodities and is highly dependent on imports of both beef and soybeans. 

During a July 2024 China visit by Uruguay's Minister of Livestock, Agriculture, and Fisheries of Uruguay the two sides pledged to work on beef production, hold a meeting of the China–Uruguay Joint Committee on Agriculture in China, and set up Chinese demonstration farms focused on green, digital and intelligent agriculture in Uruguay.

The banned Uruguayan beef exporter was dinged for having excessive levels of a compound used to control ticks in cattle. Technical problems with imports are chiefly handled by China's customs authority. A study by Chinese scientists found that soybeans with Uruguayan genetics had lower protein content than Chinese soybeans, but the study may have little relevance since the experiment grew both types of soybeans in Chinese fields and did not use commercial seed. Nor did the study take into account that Chinese soybeans are actually not in high demand.

Maybe China will offer to build a rice demonstration farm since rice is a relatively minor crop in Uruguay. Another possibility is that Han will negotiate deals for Chinese beef companies to invest in Uruguay to ship beef to China or Chinese grain-trading companies to buy a shipping terminal in Uruguay to facilitate shipping and inspection of soybeans to China. 

China announces extra tariffs on $19.5 billion of U.S. farm products

(see update of 10-percent tariff list)

China announced retaliatory tariffs on U.S. agricultural products today that will be added to imports of products that accounted for about $19.5 billion of Chinese imports of farm goods from the United States last year. Based on calendar-year 2024 import data from China's Customs Administration web site, 15-percemt tariffs will be added to $3.43 billion worth of U.S. agricultural imports and 10-percent tariffs will be added to $16.06 billion of U.S. agricultural imports.

Among the $3.4 billion in U.S. products targeted for 15-percent tariffs, cotton, corn, wheat and chicken accounted for most of the imports from the United States last year. According to China's Customs Administration, calendar year imports from the United States were as follows:

• Cotton imports from the United States totaled $1.85 billion, comprising 35% of China's cotton imports last year. 
• Wheat imports from the U.S. totaled $600 million, 17% of the total.
• Corn imports from the U.S. totaled $560 million, 15% of China's corn imports last year.
• Chicken imports from the U.S. totaled $419 million, 14% of all chicken imports. Chicken feet and paws made up more than half of chicken imports ($228 million, 14% of all imports) 

Among the $16.1 billion of U.S. products that will be assessed 10-percent tariffs, soybeans were by far the largest component, followed by sorghum, beef, and swine offal.

• Soybean imports from the U.S. totaled $12 billion in 2024, 23 percent of China's soybean imports according to China's customs data. The volume was 22.12 million metric tons. (In addition to these totals China has a separate tariff line for non-GMO soybeans which China did not import from the U.S. last year.)
• Sorghum imports from the U.S. totaled $1.7 billion, 66.8% of China's sorghum imports in 2024. The volume was 5.68 million metric tons. 
• Beef imports from the U.S. totaled $1.430 billion, 14 percent of the total.
• Swine offal imports from the U.S. totaled $695 million, 28% of imports. 
• Imports of U.S. pork totaled $164 million, 4 percent of all imports.

The importance of China as a market for U.S. products targeted for tariffs is indicated by USDA export data for calendar year 2024: 

• China accounted for 51 percent of U.S. soybean exports   
• China accounted for 90 percent of U.S. sorghum exports
• China accounted for 28 percent of U.S. cotton exports
• China accounted for 2 percent of U.S. corn exports 
• China accounted for 9 percent of U.S. wheat exports
• China accounted for 64 percent of U.S. swine offal exports and 5 percent of swine meat exports
• China accounted for 15 percent of U.S. exports of beef and products

China Plans a "Silicon Valley" for Seeds

Worried that its fragmented seed industry is falling behind multinational companies, China is finishing up a 10-year plan to create national champion seed companies. A 2-year-old plan hatched by Xi Jinping to create a "Silicon Valley" for seeds--the so-called "silicon chips of agriculture"--has big ambitions, but it depends on funding from overextended State banks and the basic matter of acquiring farmland to grow the seeds.

On March 1, the Ministry of Agriculture and Rural Affairs (MARA) held a meeting to boost implementation of a 2023-2030 "South China Seed Silicon Valley Construction Plan." According to the Ministry, the project will build a sprawling complex of labs and testing/propagation farms in Hainan Province, a region where seed breeders have long focused their work due to the ability to grow crops year-round in the sub-tropical climate. The South China zone is planned to be a center for seed breeding innovation in China, a platform for international cooperation, and an experimental zone for reforming the country's seed industry.

The "Silicon Valley" scheme is described as an upgrade from the 2015-2025 "National South China Seed Research and Breeding Base (Hainan) Construction Plan" that called for setting up a 44,150-acre protected zone for crop breeding around the Yazhou Bay "Science City." In a 2018 inspection, Xi Jinping praised the South China Seed Base as a national treasure and ordered construction of a "Southern Silicon Valley" that would concentrate R&D, production, sales, scientific exchange, and dissemination of seeds to serve the entire country.

The 2025 Central Document No. 1 on rural policy--released to the public just a few days before the meeting--included the "South Silicon Valley" project in its instructions to revitalize the seed industry. 

A symposium on revitalization of the seed industry held by MARA December 19, 2024 made it clear that the effort is aimed at making China great again. MARA described seed industry revitalization as having a prominent position in building China into an agricultural power by achieving self-reliance and self-improvement in seed technology and independent control of seed sources and ensuring the security of the agricultural industry. 

Chinese leaders seem worried that their industry is falling behind multinational seed companies. At the seed industry symposium, Agriculture Minister Han Jun warned that China's seed industry still has many shortcomings and weaknesses, "international giants are seizing the commanding heights of seed technology," and "the domestic seed industry is in urgent need of innovation, breakthroughs, and upgrades." 

China's seed industry plan reflects chronic problems of fragmentation between R&D (conducted mainly by research institutes) and marketing of seeds done by thousands of companies that traditionally conducted little or no R&D. Incentives for academic scientists to create seeds that meet market demand were muted when scholars stood no chance of profiting from their research. Profits from successful seeds were shrunk by widespread copying and fraudulent imitations.

The December seed industry symposium called for 

• creating a commercial breeding system with companies as the main body
• nurturing and strengthening a group of high-level seed companies
• deep integration of production, education, and research

Ag Minister Han Jun said support policies should be targeted at seed companies to help them breed a new batch of varieties that improve yield, performance, and quality. These include financing and insurance for companies. Han also emphasized protection of intellectual property and a crackdown on "infringement and illegal crimes" to "purify" the seed market.

The rationale for the South Silicon Valley Seed project is made clear by Minister Han's comments at the December seed industry revitalization meeting. Han called for innovative mechanisms to share and utilize resources and facilities to promote cooperation between S&T companies. This includes linking up seed companies with scientific institutes and financial institutions via seed bases. Han called for new ways to utilize scientific and technical expertise, application of artificial intelligence in breeding, construction of digital facilities and equipment to keep up with the world's cutting-edge pace in breeding. 

Source: The Paper.

According to state-owned news magazine Liaowang, the Hainan Provincial seed lab, China Seed Group's Syngenta, and Huada Genetics have been working together on projects since 2021. Liaowang reported that Hainan has gathered more than 2,800 seed industry companies, and the output value of the South China Seed Industry exceeded 12 billion yuan in 2023, a year-on-year increase of 50%.

The December 2024 meeting was attended by heads of China's elite seed companies, such as Syngenta China, Longping High-Tech, Beijing DBN, Beidahuang Kenfeng Seeds, Hefei Fengle, Shandong Denghai, and Gansu Dunhuang, as well as companies engaged in poultry, swine, aquaculture, and feed manufacturing, academic institutions such as the Chinese Academy of Agricultural Sciences, two agricultural universities, and state-owned banks Agricultural Development Bank of China and Agricultural Bank of China.

None of these articles mention problems acquiring land for the giant seed project. A Hainan Province regulation to facilitate acquisition of land for the South China Seed Breeding Base published last week reveals that progress in acquiring fields for the 44,150-acre protected zone designated 10 years ago has been slow because many Hainan farmers have been unwilling to turn over their land, there are a bewildering array of intermediaries to deal with in acquiring land, procedures are not standardized, and length of land contracts varies.

One step China took to compete with multinational seed companies was to buy one of them. In 2017 ChemChina paid $43 billion to acquire Swiss agrichemical and seed breeder Syngenta, China's largest overseas acquisition. Syngenta is still headquartered in Switzerland. Plans for a public listing of Syngenta in China--anticipated to raise $9 billion--have been scrapped due to the poor state of China's stock market. 

In their U.S. business Syngenta and its American CEO are now caught up in the frenzy over Chinese ownership of U.S. farmland. Syngenta owns multiple farms in the United States used for crop trials, and Arkansas has already ordered Syngenta to sell its 160 acres in that state. This raises the question of how the company will develop and test chemicals for the large U.S. market for seeds and farm chemicals if it cannot own any land there.

Syngenta announced last week that the company has made a deal with the Shanghai government to build its 3rd global crop protection innovation hub at a site in Shanghai (the other two are in Switzerland and the UK). This giant facility will focus on crop protection chemicals, biologicals, soil health, sustainable chemistry, and integrated pest management.