September 29, 2008

 

 

China's corn harvest will exceed last year's, but a US-based group pegged total production below the government's official estimate.

 

The US Grain Council's annual China Corn Tour estimated the country's 2008 harvest will total 153.54 million tonnes, a 1 percent increase over 2007. The tour's estimate is about 2 percent lower than China's official harvest estimate.

 

The USGC's estimate was based on stalk, ear and kernel counts taken in nearly 300 fields across northeastern China, including Jilin, the country's number one corn-producing province. Four groups travelled different routes and then regrouped to compile their final numbers for public release Friday (September 26).

 

The tour pegged national average yield at 84 bushels per acre, the USGC said in a conference call Friday. Jilin farmers should reap 111 bushels/acre, the highest yield in the nation, according to USGC.

 

"We see total (corn) hectarage in all China as flat to slightly down, but with better weather and rainfall compared to last year," said Cary Sifferath, USGC senior director in China. Despite signs of spotty drought, hail and wind damage, "we're seeing yields much higher than last year," he said.

 

The Chinese government is trying to control the loss of farmland to other uses; any future acreage increase must happen at the expense of other crops, he added.

 

China is trying to develop its own biotechnology for corn and is not using seed technology marketed by multi-national life-science firms, hence, farmers have yet to enjoy the bio-tech-driven yield increases seen on US farms. US farmers yielded 151.1 bushels per acre in 2007 and are expected to net 152.3 bushels per acre in 2008.

 

Tour participants noted improved hybrids could help farmers combat observed problems with corn borer pests and weak stalks, which are susceptible to bending and breaking.

 

Chinese yield also lags the US because farmers use less seeds per acre, partly because they can't risk greater cash outlays for seed, especially with increase input prices, and partly because they use two to three seeds per hole because they don't trust the seed to sprout, said Sam Niu, USG assistant director in China.

 

Chinese corn fields average 45,000-50,000 plants per hectare, while US fields average 75,000-80,000, Niu said.

 

Cash prices for corn are currently at about US$5.98 per bushel in Jilin. Harvest is just beginning with some areas estimated to be as much as 20 percent complete, while other have yet to start, tour participants said. Domestic cash prices in the US averaged about US$5.15 Friday morning.

 

China's grain stocks numbers are like "a national secret," said Sifferath, noting the government does not release an official estimate. The US Department of Agriculture pegs China's ending stocks at 36.38 million tonnes and shares the government's official 2008 production outlook at 156 million tonnes.

 

Sifferath said there's an unofficial consensus that feed demand - the greatest portion of Chinese corn use - is growing as the livestock industry rebounds from disease pressure of recent years. But replenished wheat stocks might supplement feed rations, he added.

 

He also noted that the Chinese government capped grain available for biofuel production at 26 percent of the total production and is not issuing any more licenses to feedstock-based fuel plants. Corn sweetener usage may also dip due to a big sugar harvest, Sifferath said.

 

"The government has virtually shut down exports of corn and even wheat and rice for that matter," Sifferath said. "(It's) trying to control food inflation (by) holding on to the grain stocks they have. I think they'll hold on as long as they see worldwide stocks tight and prices volatile."

 

China's agricultural workforce is gradually mechanizing as rural residents relocate to cities, but planting and harvesting is still largely accomplished by hand, tour participants note.

 

"We never saw a combine; we saw a lot of people with little sickles running around," said Charles Ring of the Texas Corn Producers and a USGC advisory team leader. "We never saw a mechanical harvester in the field. We saw some on the side of the road and people looking at them."

 

The USGC is a private, non-profit corporation with nine international offices and programs in more than 50 countries. Founded in 1960, the council develops export markets for US barley, corn, grain sorghum and related products.

 

Tour participants included agronomists, analysts, economists, participants in the Chinese grain trade, US Foreign Agricultural Service staff and USGC members and employees.