Increased moisture as well as insect and disease damage could lead to a 4-5 percent decrease in China’s 2005 corn crop. Dr. Todd Meyer, the U.S. Grains Council’s senior director based in Beijing, made the projection during a live conference call today on China’s 2005 production levels and overall feed grain supply and demand.

“By the time you add everything up, it looks like a 4-5 percent reduction across the board from last year,” said
Meyer. “USDA is estimating production levels ranging from 126-128 million metric tons (4.96-5.04 billion bushels) and we’re below that level and we could adjust those numbers as we see harvest numbers come in.”

Each year, due to the lack of timely reporting by other entities, the Council conducts its own unofficial on-the ground survey of China’s corn crop. Participating in this year’s tour with Meyer was Adel Yusupov, manager of international operations – Asia as well as representatives from USDA, the Agriculture Trade Office and other U.S. trade representatives.

The annual corn tour focused on the North China Plain (south of Beijing) and the northeast region of China (which includes four provinces). Meyer estimates that the total planted corn area in northeast has remained flat while yields are down about 10 percent compared to last year. In the North China Plain region, it’s estimated that corn area has increased slightly while cotton is on the downslide. Corn yields in the area are about the same as last year.

The Chinese government statistical service estimates average corn production at 5 tons per hectare, or roughly 80 bushels per acre. This includes marginal land that is not aptly suited for corn production. Meyer says that major corn producing regions – such as the seven provinces visited by the team over the past week – are averaging 6-7 tons per hectare or 96-112 bushels per acre.

When asked how strong of an influence China will be on the world market, Meyer said he thinks official estimates of them having a 3 million ton export market in the next year could be a good place to start, but may be on the high side. “China’s export levels could be significantly lower in my opinion,” he continued. “The key period to watch is May or June next year when their supplies tighten up and prices increase.”

A key factor playing into Meyer’s assessment is China’s increasing internal corn demand caused by rising urbanization and protein demand. At the current rate, corn demand is rapidly approaching domestic output levels.

The U.S. Grains Council is a private, non-profit partnership of farmers and agribusinesses committed to building and expanding international markets for U.S. barley, corn, grain sorghum and their products. The Council is headquartered in Washington, D.C., and has 10 international offices that oversee programs in nearly 80 countries. Support for the Council comes from its members and the U.S. Department of Agriculture.