Dim Sums: Agricultural Markets in China

In land-scarce China, swine farming companies are making a great leap to factory farming by spending billions on high-rise, high-tech hog barns up to seven stories high. With generous subsidies, Chinese officials view these farm factories as a improvement on the traditional "backyard" livestock farming model--long viewed as a road to riches for generations of rural households. However, this corporate farming model is highly experimental, still unproven, and investors probably did not count on the cratering of hog prices this year.  Swine go down a ramp inside a high rise barn. These farms have varying designs, but they typically feature 5-7 story buildings that move pigs from floor to floor by elevator at different stages of their life cycle. Ventilation, temperature control, feeding, monitoring of pigs is often controlled by automated sensors, thermometers, and cameras. Animal waste is transported through tubes to centralized treatment facilities. A recent article by Agricul...

Corn was the crop most impacted when floods covered large swathes of China's Henan Province during July 2021. It turns out that officials had canceled insurance for corn four years ago, even though corn is by far the biggest crop grown in Henan during the summer, so many farmers were not insured. Flooded fields in Henan Province in July 2021 This oversight was revealed in an August 16 Beijing News interview with two agricultural insurance experts from China's Academy of Agricultural Sciences which revealed numerous shortcomings in the country's huge subsidized agricultural insurance program.  The experts explained that China's agricultural insurance program is the biggest in the world. According to the Beijing News interview, premiums grew 27-fold to about $12.5 billion from its launch in 2007 to 2020--significantly larger than the U.S. agricultural insurance program. China's agricultural insurance covers 16 major commodities and 60 local specialties. Insurance c...

Chinese officials are acknowledging that the country's statistics are riddled with fraud now that Xi Jinping has targeted statisticians in his expanding campaign to purify the Chinese communist system. Chinese statistics in the "new era" will be improved by endless audits, punishment of perpetrators, and replacement of humans with "smart" computers and gadgets when possible. The attack on statistical fraud kicked into high gear with an August 30 speech by Xi Jinping summarizing his ideas for improving the quality of data in his "Opinions on more effective use of statistical supervision functions ." That was followed by a series of articles posted on the National Bureau of Statistics web site explaining a third round of statistical inspections to root out fraud, falsification, and concealment of data.  The Bureau's director Ning Jizhe issued slogans for statisticians to contemplate: "Statistical data quality is the lifeline of statistical work....

China's latest survey shows that cultivated land comprised 16 percent of national land use. Orchards and plantations account for another 3 percent. Forests and grasslands are the most prevalent land use, covering a combined 68 percent of land area. Urban/industrial/mining covers 4 percent of land, according to the survey results. The land survey results were released in a communique by China's Ministry of Natural Resources and National Bureau of Statistics after 3 years of work. This survey measured land area as of December 31, 2019. The previous land survey had gathered land data as of 2009.  Calculated from China 3rd National Land Survey. The sum of land area categories reported by the Chinese land survey totals near 7.8 million square km, substantially less than the 9.4 million square km China total land area reported by World Bank statistics. China's 2020 Statistical Yearbook reported data for 2017 slightly different from the 2009 land survey totals. Officials are cong...

With China's grain and soybean imports on a record pace and agricultural prices at a high level, communist propagandists are blaming multinational companies for price-gouging. When Chinese officials blame someone else for a problem, they are usually trying to divert attention from their own mistakes. Wonder what they're hiding? On August 11, the Party's Economic Daily asked, " International grain prices are persistently high; are domestic grain prices stable? " This article cited the covid-19 pandemic, flooding, drought, supply chain disruptions, and soaring shipping costs for driving world food prices to a high level. This article called for China to increase its control of food supply chains, diversify its sources of imports, create major Chinese international grain merchants, and increase China's voice and price-setting power in global markets (all mentioned briefly in the 2021 "Number 1 Document." A week later, Economic Daily's " Corn m...

China's hog market boom has turned to bust, feeding worries in corporate boardrooms and government offices. As profits and equity vanished, pig producers have pulled back on feed purchases and trimmed expenses.  China's African swine fever (ASF) epidemic produced a 2-year M-shaped price cycle. The first cases of ASF appeared in August 2018, but hog prices were depressed until mid-2019 as farmers killed off their herds to avoid the epidemic. Prices soared about 150 percent in three months--reaching their peak in November 2019. Hog prices fluctuated in mini-cycles until they crashed during the first half of 2021. China's hog prices are now back where they started in 2018.  Average wholesale price from China Ministry of Agriculture and Rural Affairs. At these prices most hog producers are said to be losing money. Farms monitored by China's Ministry of Agriculture and Rural Affairs posted a 9.7-percent loss in May 2021. Most corporate hog-farming companies reported substant...

Some U.S. politicians warn of a Chinese takeover of American farmland, but the one big acquisition of U.S. farming assets may have been a bust for the Chinese buyer. At the same time U.S. politicians were moaning about land grabs, a Chinese meat scion got booted from his dad's company for arguing that the acquisition of Smithfield Foods was a boondoggle.  Last month Rep. Dan Newhouse of Washington State warned , “The current trend in the United States is leading us toward the creation of a Chinese-owned agricultural land monopoly.” National Public Radio got in early on the story by running  a May 27 segment  on the threat of foreign investors gobbling up U.S. farm fields and destroying rural communities, with a nod toward a Chinese company's ownership of Smithfield grain elevators as a prime example. Within days, politicians glommed on and numerous stories led with a warning that "China is buying up U.S. farmland," citing USDA statistics and the example of the Smithfi...