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Senior Advisor
Posts: 2,569
Registered: ‎05-13-2010
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China abandons food self sufficiency

A Chinese bureaucrat has admitted the attmpt at food self suffiiency is no longer feasible for the future. China made the obvious exception for soy as it determined it didn't have the water resources available and it could benefit from value added by crushing it themselves near the coasts where most of the populaion and hog herds were located.

So, what does this all mean? Corn. The beginnings of corn imports mirroring soy. And meat, to the extent they can't keep up w/ demand. In addition China is experiencing net migration from rural to city.

The statement indicated that likely self sufficiency would be largely maintained for rice and wheat - and they are the globes biggest producers. Though some wbeat is being imported this year.
Advisor
Posts: 1,412
Registered: ‎06-25-2010
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Re: China abandons food self sufficiency

Abandon?  Or do they mean stop the expansion of production.  Either way that is positive for US Grains.

Senior Contributor
Posts: 206
Registered: ‎05-17-2010
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Re: China abandons food self sufficiency

China's Big push the last three years is the expansion of their pork industry. They are by far the largest pork producer in the world, and still import pork. With their expansion of the middle class, the pork and poultry consumed per person has gone up drasticly. Now perhaps with the opening of trading their currency, the demise of the dollar, could make it cheaper to steal the food right off our plates!

Esteemed Advisor
Posts: 2,643
Registered: ‎04-29-2011
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Re: China abandons food self sufficiency

It appears that they will be stealing our corn as well.........Let's see, how does that go?  Oh yes,  buy corn from the U.S. and then in a few weeks, cancel that order......wait for the market to collapse because of their cancelled order......then buy again at the cheaper price.  They have a good thing going in our soybean market, why would they change when they import corn?

Senior Advisor
Posts: 2,569
Registered: ‎05-13-2010
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Re: China abandons food self sufficiency

China is a well known and understood factor in the market. They buy. You sell. It disappears from the market. You don't have to sell when they cancel. You can wait. They are probably more predictable than most of the market news, and certainly more so than some floor trader's stories.

They are a plus in the market. How could it otherwise?
Senior Contributor
Posts: 481
Registered: ‎10-18-2010
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Re: China abandons food self sufficiency

Nothing personal Mr. Palouse, but you lose me again. China’s economic backdrop has been improving since 1970, more pronounced recently. As their middleclass grows, they can afford a richer diet and use more and more of all commodities.

 

They have a large population some 1.5B I think it is therefore They eat a lot!! As they industrialize and come into the modern world NO one would expect them to be or try to be self sufficient is ag goods. Any modern nation puts its resources to what makes best use economically and imports/exports become the equalizer.

 

What is new? Nothing.

 

One can filter net news daily to try and find a bullish slant to back their perma view, but that really has zero to do with the equation at hand. Supply- demand and prices that drive production. Those items are the elements of having some handle on the mkt.

 

If we have wx problems in 2013 corn will explode if not it will, plummet. There isn’t much more to it.

 

Senior Contributor
Posts: 181
Registered: ‎01-19-2013
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Re: China abandons food self sufficiency

Pretty solid post Mr. Pritchh. Going to be a tough year to make decisions. If it rains, we go down, if it doesn't we go up. Foggy all day in Iowa. Old timers will tell you that 90 days later we get precipitation in some form. I would say that April 28 would be a pretty nice time to get an all day shower. Of course, all the doomsdayers think that it will never rain again. Wasn't it you that coined the phrase "Crops mostly grow." As for me, I will continue to bet on the American Farmer.

Senior Advisor
Posts: 2,569
Registered: ‎05-13-2010
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Re: China abandons food self sufficiency

The main issue is their policy of self sufficiency as a national security priority and their recognition that their domestic demand is outstripping their ability to stimulate domestic production. Their attempts to increase domestic production have resulted in dramatic increases in agricultural supports - with the additional priority of increasing rural income to stay within sight of their urban bretheren's ever increasing standard of living. Rural revolt is China's nightmare and the.crippling of food production which could politically destabilize urban areas.

The result is that China will loosen the restrictions on imports. They will have to trust world markets. I believe try will still maintain strategic grain inventories for price control auctions as much as for anything.

This change in sufficiency policy is a big step politically and psychologically and signals a readiness to participate in the global community rather than view themselves as seperate. To seek security within the community rather than as a paranoid and isolated country maintaining their distance while trying to take advantage of markets.

Keep in mind that China produces more than two times the food we do. And yet they need more and we need to have it available.
Senior Contributor
Posts: 180
Registered: ‎06-28-2010
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Re: China abandons food self sufficiency

Betting on the American farmer when the game has changed might not be the best bet. Ethanol and insurance have changed the game now throw in weather volatility and you change the outcome of the game. One thing I do know is you don't bet against Mother Nature. 

Senior Contributor
Posts: 481
Registered: ‎10-18-2010
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Re: China abandons food self sufficiency

China has been involved in world trade/mkts for decades. Soya use has risen since day 1.

Repeating, NO modern country with a copy of Econ 101 wishes to be self sufficient, instead they

wish to be economic.

 

I sat next to a young Ag Exec that works for the Chinese govt Ag dept, very friendly, very smart.

Their ag output will continue to expand, yields, et al.

 

Sure world trade is good, without it SRW would be .50!

 

It is GOOD we import crude oil, we wish to use it, and fortunately the world has it to sell to us.

We cnan't produce what we wish to use.  What we can produce taht economically competes

we expoet- S C W, high value added peoducts, autos I think  and so on.

 

I believe we are # 1 in exports.  

Pritch.