China's Livestock Sector Continues to Demand More U.S. Corn

China's Livestock Sector Continues to Demand More U.S. Corn

In 2010, China became a net importer of corn. It's now the fastest growing market for U.S. corn.

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 Leadership mission heard while visiting Guangzhou, China, last week.

The group, which included Tom Mueller, director of the Illinois Corn Marketing Board, visited the southern China City of Guangzhou during a 10-day trip to Southeast 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 year to already overcrowded roads.

"China is very sensitive to food security issues and stability is job one for the government," explains 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 (157-394 million bushels) annually. However, policy and infrastructure issues pose potential threats to this business.

Inconsistent biotechnology policy and a lack of synchronous 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 facility. 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.
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