August 11, 2010

China to increase corn imports

According to recent reports, China is about to increase its corn imports, offering American farmers a chance for greater profits.

The potential change in China's agriculture policies could have an effect in Indiana and in Tippecanoe County, a Purdue expert says. There's been talk for years of China changing its policy of self-sufficiency to import corn, said Chris Hurt, an agriculture economist at Purdue. China's population - growing in size and wealth-means a need for more and better quality food.

An increase of exports would be big for Indiana farmers, he said, and could raise crop prices and land values. This year China imported corn to feed livestock-for meat, milk and eggs-after years of relying on its own corn, except for between 1994 and 1996 when the country also imported corn, according to a recent report by The Associated Press.

"But China doesn't like to talk publicly about many of its policies, so it's just speculation if it's going to last. The 1.7 million tonnes isn't much, but it's enough to make people notice. That was enough to get markets excited. Again, anything the Chinese are going to do is uncertain," Hurt said.

Hurt also said inventory is tight. An increase in trade could hurt the balance between food and food needs. "In the last four years, we've seen a big increase in biofuels in a time when we're trying to feed a very big population in the world," he said.

Increasing production is risky because no one knows for sure what the Chinese are planning. But Hurt said that in the last century, probably the biggest agriculture problem in the US has been overproduction. American farmers have the resources to "maximize production"-and they are hungry for it.

The US already exports every fourth row of soy to China, Alan Kemper, first vice president of American Soybean Association said. This year China imported 700 to 800 million bushels of US soy for oilseed-about 2.5 times Indiana's production.