October 7, 2011
The US Grains Council anticipates China's rising corn demand will continue to create export opportunities for US farmers next year and beyond, despite its record corn harvest this year.
"China has great potential to increase its corn yields, but when you consider they have a population of 1.2 billion people that are looking to add higher quality protein to their diets plus create a 25% grain reserve, then you see an opportunity for US corn exports," said Don Hutchens, executive director of the Nebraska Corn Board, who participated in this year's China's crop tour.
"They place a high value on corn and what it can be turned into. They have also had a taste of the feed value of dried distillers grains, which are produced by ethanol plants," he added
China's rapid economic growth has produced the world's fastest growing middle class, and demand for meat and dairy products is soaring, Hutchens said. China's domestic corn prices this summer reached US$10 a bushel and it has seen drawdowns of already low stocks.
A record harvest may reduce these pressures in the short-run, the Council said, and may give China an opportunity to rebuild depleted stocks through imports. Current estimates for China's likely 2011-12 corn imports vary widely and range from 78.7 million bushels (USDA) to more than 393.7 million bushels (private estimates).
"Over time, China's need for corn will grow and the US, being the world's largest producer would be a logical source for that corn," Hutchens said.
"With our ability to grow enough corn for our own feed, fuel and food uses and still have enough left over to satisfy a healthy export market, it just makes sense that we'll continue to be the reliable source for corn globally," he added.