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November 3, 2011

 

China's corn output to hit record on rising acreage

 

 

China's corn production could rise by 6.7% to a record this year because farmers had planted more and the favourable weather boosted the harvest, according to a Bloomberg report.

 

Output jumped to 189.18 million tonnes (7.5 billion bushels) from 177.24 million last year, based on a survey of the seven largest corn growing provinces during the harvest in September and October by Geneva-based SGS SA for Bloomberg. The estimate tops the 182 million tonnes forecast by the USDA on Chinese growers may boost acreage 4.6% in 2012, SGS said.

 

Domestic production will reach a record for the seventh time in eight years after farmers planted 6.1% more land than in 2010, according to the survey of farmers in the northeast provinces of Jilin, Heilongjiang, Shandong, Henan, Hebei, Liaoning and Inner Mongolia. China is expanding domestic supply as rising meat and dairy consumption boost demand for grain used as livestock feed.

 

"The extra acreage was the biggest factor for higher production, and it looks like farmers want to plant more next year," Mark Oulton, the market research director for SGS, said yesterday in a telephone interview from Wilkes-Barre, Pennsylvania. "Corn is more profitable than other crops."

 

After wet, cold weather delayed planting in much of north-eastern China, farmers benefited from regular rains and no sustained periods of heat, according to World Weather Inc. in Overland Park, Kansas. Dry weather aided harvesting in September and October. Yields in the seven provinces increased 0.6%, according to SGS estimates.

 

The cost of seed, fertiliser and crop-protection chemicals rose an average of 25% in 2011, Oulton said.

 

The survey, which included 305 interviews with farmers in the region, was compiled using five teams of agronomists who travelled about 7,000 kilometres (4,350 miles) in seven central and northeast provinces that produced about 70% of the nation's corn harvest last year. About 6.7% of the region's crops are soy and rice accounted for 5.7%.

 

Heilongjiang, the top-growing region last year, saw a 14% increase in planted area that offset an 8.6% drop in yields from wind and insect damage, survey data show. Acreage rose 3.7% in Jilin, the second-largest grower, while dry weather and winds cut yields 4%. Disease caused less harm this year, with 11% suffering normal to severe damage, down from 15% a year earlier.

 

The biggest jump in productivity occurred in Liaoning Province, where rains and reduced damage from insects led to a 36% jump in yields, compared with last year's drought- damaged crop, the survey showed.

 

Unlike the US, where most corn is sown and harvested using heavy machinery and the average farm is about 248 acres, most of the crop in China is planted and harvested by hand, Oulton said.

 

About 61% of farmers in the region had less than one hectare (2.47 acres) of land, up from 58% a year earlier, according to the survey. Farms larger than eight hectares increased to 4% from 2%.

 

SGS's final crop estimate was derived from its survey and official government forecasts for the rest of China, where farms are widely dispersed. The survey's margin of error was 5.7%, with a sample size determined to obtain a 95% confidence level, according to SGS.

 

Less than 50% of China's population, the world's largest, is involved in agriculture, down from more than 70% a decade ago, Fang Yan, the deputy director at the National Development and Reform Commission, said this week.

 

"Some people are just moving into the cities and renting out the land to their neighbors," Oulton said.

 

The number of rented farms increased to 27% of the total surveyed, from 21% a year earlier, SGS said. Farmers rented 39% of the land for corn cultivation in Heilongjiang, the most in the survey. Farmers paid rent on 30% of the corn land in Jilin, and 6% in Hebei, the least in the survey.

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