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China corn crop may be enough to avoid imports
 
By RICK A. RICHARDS
Indiana Correspondent

WASHINGTON, D.C. — Since 1996, the U.S. Grains Council (USGC) has visited China to get a close look at that country’s corn harvest, giving producers here a better grasp of production there. Unlike the statistics-filled reports issued by the USDA, there is no similar agency in China.

Production and crop yield numbers in China, the world’s No. 2 corn producer, are a closely held secret, which is why the annual trip by the USGC is so valuable. And while this year’s report didn’t have many numbers as in previous years, the Council said the 2012 Chinese corn crop will be good.

“Persistent reports of weather and pest problems in some areas this summer, plus recent typhoon impacts in northeastern China, had raised concern about potentially significant yield reductions,” said USGC President and CEO Tom Sleight. He added while the impacts of weather and pests are small, this year’s harvest will not be “a best-case scenario” for Chinese corn.

“The U.S. drought and short 2012 crop are pressuring buyers in all sectors,” said Sleight. “But corn trades in a global system, and the safety net is the capacity of other producers to step up. The United States is by far the world’s largest corn producer and exporter, but in a tough year for U.S. corn, it is a relief that the world’s No. 2 producer is having a good year. That will help limit demand destruction and preserve markets for U.S. corn as we rebound next year.”

China has historically been an export competitor of the United States. But starting in 2010, the country began importing corn and, last year, purchased 5.2 million metric tons (205 million bushels) of U.S. corn. That isn’t likely to happen this year, said Chris Hurt, an agricultural economist at Purdue University in West Lafayette, Ind. “USDA has China not buying U.S. corn from our 2012 crop. If their crop is larger than the 200 million metric tons that USDA has currently, then they may not buy hardly any corn for import,” he said. “They have been increasing their stocks since 2006-07, when stocks reached a low of 25 percent of use.

“For the current marketing year of 2012-13, USDA has them at an estimated 30 percent stocks-to-use ratio. They would probably like to have that in the 30 percent to 35 percent range, where corn prices come down more and they can build stocks at lower prices. But they are not in a tight situation and can avoid buying imports if their crop is more than 200 million metric tons.”

Harry Bormann, a Grain Team leader with MaxYield Cooperative in West Bend, Iowa, isn’t concerned over the lack of specific yield numbers in this year’s China corn crop report.

“I’m always suspect of numbers anyway,” he said. “I haven’t heard anyone else overly concerned about that, either. The number that people should be concerned about when it comes to the China corn crop, is that more than 80 percent of it is harvested by hand.”
Marri Carrow, spokeswoman for the USGC, said the organization began the trips in 1996 when China was a major competitor of the United States. “Now things have changed and they have become an import customer. It’s happened over the last two to three years.”
As a result of that change, the purpose of the annual visit to China has changed. “We’ve retooled the purpose of our visit,” said Carrow, adding there isn’t the need for as many statistics from the trip as there used to be. “It’s not because of the presidential election or fear of offending China. We are constantly evaluating our programs and our export promotion programs. This is a part of that.”

Like Bormann, Carrow said the one number everyone should be aware of is that between 75-85 percent of the Chinese corn crop is harvested by hand. She said the millions of small plots where corn is grown simply aren’t large enough for a combine and even where there is room, the combines are small, picking only 4-5 rows at a time. “You just don’t see the big combines harvesting crops in China like you do here,” she said.

Bormann and Carrow both said that single fact has more to do with China’s productivity as a world corn producer, than anything else.
The USGC was founded in 1960 and is a private, nonprofit corporation with nine international offices and programs in 50 countries.

Its purpose is to create export markets for U.S. barley, corn, grain sorghum and related products.
10/25/2012