China and hogs

[Palouser]

This caught my eye - from Bloomberg this morning.

".....Farmers in China reduced herds after prices declined almost
20 percent in the 15 months through March 2010, according to
Wang Xiaoyue, an analyst at Beijing Orient Agribusiness
Consultant Ltd. The government yesterday said it will seek to
expand hog supplies by offering subsidies to farmers.[end]

In the past, when China has used subsidies in ag production they have gone all out. They will increase hog supplies IMO, probably significantly, in order to blunt food inflation. Soybean imports will be strengthened.

[Palouser]

Keep in mind that China is tempering its need for feed from the USA by buying Aussie feed wheat to the tune of millions of tns. This in turn is taking wheat off the market in terms of raw numbers. It's clear that China's future imports will build.

[timetippingpt]

Excellent points Palouser. Your knowledge of foreign trade is impressive to say the least.

For us few idiots who still raise hogs, it is nice to see that they have realized it is cheaper to import the meat intead of the feed at current price ratios. They could easily import enough pork to keep pork profitable for the next 9 months regardless of corn prices.

[Artifice]

"In the past, when China has used subsidies in ag production they have gone all out. "  false.

China's output is rising from the ashes of 200$/per capita in 1970 to 7k or so per capita. As incomes rise, ability to eat a more expensive diet rises. There isn't change overnight.

China imports more and grows more, responding to prices. ANd world producers respond as they have for 50 and 100 yrs.

A headline, doesn't change demand, its gradual and is equational. bean use has been rising for 100 yrs, and producers over respond. look at world stocks of beans.

Artifice

[Artifice]

Keep in mind that China is tempering its need for feed from the USA by buying Aussie feed wheat to the tune of millions of tns. This in turn is taking wheat off the market in terms of raw numbers. It's clear that China's future imports will build.''''

You maye be new, look at USDA WASDE #s. China uses more annually if beans are 4 or 12.

US SRW wheat ES will grow by 150 mb. 

Wheat looks well supplied.

[Artifice]

Keep in mind that China is tempering its need for feed from the USA by buying Aussie feed wheat to the tune of millions of tns. This in turn is taking wheat off the market in terms of raw numbers. It's clear that China's future imports will build.''''

You maye be new, look at USDA WASDE #s. China uses more annually if beans are 4 or 12.

US SRW wheat ES will grow by 150 mb. 

Wheat looks well supplied.