After concluding its tour of China's key production area, the U.S. Grains Council (USGC) today said they expect China to produce a record crop of 167 million metric tons (MMT), an increase of approximately 9 million tons over last year.
USGC is using a projected corn harvest area of 30.9 million hectares (76.35 million acres) and a yield of 5.39 tons per hectare or 85.9 bushels per acre.
"As a farmer, I’m always happy to see strong harvests, and today’s figures are good news," said Dr. Wendell Shauman, USGC chairman. "Demand for high quality protein continues to grow, thanks to the surging growth of the global middle class. As a result, world corn prices this summer and fall reached record highs. Strong harvests will help moderate prices and keep our international growth markets on track. In the long run, that’s good for both producers and consumers all around the world."
As recently as 2002-03, USGC notes China exported nearly 600 million bushels of corn. Exports then began to decline, and China was a net importer in 2009-10 and 2010-11. Projections for China’s corn imports in 2011-12 vary widely, from 2 MMT or 78.7 million bushels (USDA) to more than 10 million tons or 393.7 million bushels (private estimates).
USGC still believes China’s production will be insufficient to meet anticipated domestic demand, saying the country has drawn down its stocks below its comfort level, which is roughly 25%. "The Council believes the 2011 production will provide for 14% to 16% ending stocks. Therefore, China will need to import to fully satisfy domestic demand and rebuild those stocks," said Don Hutchens, Nebraska Corn Board executive director who participated in the Tour.
Over the past seven years, the cumulative difference between the Council’s crop production estimate and the official Chinese government estimate is approximately 97 million tons (3.8 billion bushels). Private sector analysts generally believe China’s corn reserves, figures for which are not officially released, have been drawn down during this period. In addition, domestic corn prices are high, and in the last two years China has reemerged as a major corn importer.