USGC Corn Mission Told to Expect Strong Chinese Demand

USGC Corn Mission Told to Expect Strong Chinese Demand

Two Wisconsin corn growers participated in 10-day trip to Asia.

Tell your children to stay in agriculture because demand for U.S. farm products will continue. That is the overriding message members of the 2011 U.S. Grains Council's Corn Mission heard while visiting Guangzhou, China, last month.

The mission team, which included Wisconsin corn growers Randy Woodruff, Chippewa Falls, and Nancy Kavazanjian, Beaver Dam, visited the southern China City of Guangzhou during a 10-day trip to Asia. Located in the Pearl River Basin on the South China Sea, Guangzhou is the largest feed manufacturing center in China. With a population estimated at nearly 15 million and average income of $16,800, its rapidly growing middle class consumes the most meat protein in China. The city also adds 20,000 cars a month to already overcrowded roads.

"China is very sensitive to food security issues and stability is job one for the government," explained Jorge Sanchez, director of USDA's Agriculture Trade Office, Guangzhou. "The government wants to keep farmland producing food and China has the 'invisible boot' that pushes farmers to produce. But the government also knows there never will be nearly enough land to meet demand and I don't see yields growing or more farmers going into production."

In the past China supplied corn to other Southeast Asian countries but that changed in 2010, when the country became a net corn importer. For the coming marketing year, China is expected to import nearly 3 million metric tons of U.S. corn, making it the fastest growing, and second largest, U.S. corn customer. Sanchez expects Chinese corn imports could grow to between 4 to ten million metric tons (157 to 394 bushels) annually. However, policy and infrastructure issues pose potential threats to this business.

Inconsistent biotechnology policy and a lack of asynchronous approval for new U.S. biotech events is another potential problem U.S. corn growers are watching in China.  Sanchez stressed the importance of relationship building on the issue to avert cargo rejections. His office is working through social media in China to proactively build consumer confidence in biotechnology.

China is the world's largest swine producer and consumer in the world and mission participants also visited a large modern swine company. With 20,000 breeding pigs and 80,000 commercial pigs, the Guangzhou Lizhi Agricultural Co., has plans to expand production to meet increasing domestic demand.

While in Japan, Woodruff and Kavazanjian toured the Kushiro Port in Hokkaido, Japan, and heard firsthand about plans to expand the port's capacity to accommodate larger vessels. Kushiro is the largest port facility in the heart of Japan's major dairy producing area – Hokkaido, Japan.

The Director of the Kushiro Port Office for Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLIT) Tetsuya Hayakawa explained to the group that the port was selected in June as one of the eight Japanese ports to undergo a massive expansion in an effort to remain competitive internationally. Currently, no grain discharging ports in Japan are large enough to accommodate the size of the expected post-panamax that will come with the expansion of the Panama Canal.

Mission participant Kavazanjian said the visit was a worthwhile and vital interaction as the expansion of the port will help to increase Japan's grain import capacity at a competitive price. "Japan is our number one market for corn. This expansion and work to accommodate the larger vessels will help to ensure that Japan remains a reliable corn customer. At the same time, it will help reduce transportation costs, and help Japan remain competitive," she said.

While in Japan the team also visit a beef operation raising Holstein and Wagyu steers and participated in an event at a specialty noodle factory where they were served ramen noodles made with a 20% corn flour, rather than the more traditional rice or wheat noodles.

In Vietnam, the trade mission met with a major grain and oilseeds importer who buys Dried Distillers Grains (DDGS) and soybeans in containers through the DeLong Company of Clinton, Wisconsin. They also toured a large and expanding swine operation to see how Vietnam farmers are working to meet their country's growing demand for meat.

The U.S. Grains Council is a private, non-profit organization dedicated to building export markets for barley, corn, sorghum and their products. Wisconsin corn growers provide financial support to the USGC through the state corn checkoff. The primary objective of Wisconsin's corn checkoff program, which is administered by the Wisconsin Corn Promotion Board, is to maintain and expand sales of Wisconsin corn.

For more information on Wisconsin's corn checkoff or the WCPB contact Bob Oleson, executive director of Wisconsin Corn Programs at [email protected], by phone at 262-495-2232 or go to the web site at www.wicornpro.org

TAGS: USDA
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish