In its monthly World Agricultural Production report, USDA’s Foreign Agricultural Service (FAS) indicated that, “USDA estimates China marketing year (MY) 2021/22 corn production at a record 273.0 million tonnes, 5 per cent above the 5-year average of 260.3 million tonnes. Yield is estimated at a record 6.5 metric tons per hectare, highest in five years average.
World Agricultural Production. USDA- Foreign Agricultural Service stated that, “The major factors shaping USDA’s forecast are the favorable growing season conditions and government policies encouraging increased corn production. The Marketing Year 2021/22 season has been characterized by favorable growing conditions across the major corn belt, the northeast, and north- central plains. In particular, the Northeast provinces of Heilongjiang, Jilin, Liaoning, and Inner Mongolia, where close to half of the nation’s corn and soybeans are produced, experienced beneficial weather for a major part of the growing season.”
In addition to the favorable seasonal conditions, farmers were also encouraged by government policies to reduce the area left fallow and to increase rotation of grain crops. Additionally, the government provision of targeted incentives and subsidies to corn processors and ethanol program initiatives have increased corn area. Previously, government policy aimed to reduce corn area. The policies are expected, in the short run, to contribute to the increase in corn production. Approximately 75 per cent of China’s corn is used for feed.”
The World Agricultural Supply and Demand Estimates (WASDE) report stated that, “Despite a forecast increase in corn production, imports are unchanged for 2021/22 as the gap between China’s domestic and international corn prices is expected to persist, particularly in the feed deficit South.” Meanwhile, Reuters reported late last week that, “The U.S. government lifted its forecast for the country’s corn harvest by 1.7% after farmers devoted more acres to the grain than previously reported.” “U.S. corn production will reach 14.996 billion bushels, which would be the second biggest harvest ever,” the Reuters article said.