November 7, 2014
Drought ends four years of record corn harvests in China
The record surge in China''s corn output is over as the country faces its first production fall in five years following a long drought.
Output in the current crop season is expected to drop 3.6%, the biggest slide in a decade, to 210.6 million tonnes, according to press reports. In early October, the US Department of Agriculture predicted a much smaller production decline of only 0.7% to 217 million tonnes.
A lack of rain from May to August, however, turned into one of China''s, worst droughts in recent history.
"The drought''s impact was serious in some provinces, with yields not as good as hoped for," said Fred Gale, senior economist for market research on China at the US Department of Agriculture in Washington.
Until last year, China had four straight years of record corn harvests. Since 2010, production expanded by 33% thanks to government subsidy.
In 2008, government began buying corn from farmers way above market prices, enabling the country to amass the world''s biggest corn stockpile at 77 million tonnes.
China, the world''s No. 2 corn grower, will produce less corn this year, a first during the last five years, according to SGS SA, which did crop production surveys September and October for a business news agency.
China, already the second-largest corn user, is becoming less able to grow as much as it consumes and will supplant Japan as the world''s top importer by 2020, according to the USDA.
As the economy grew almost sixfold over the past decade, higher incomes led to a surge in meat demand and the need for more grain to feed cattle, hogs and poultry.
China is the largest consumer of pork, ranks second in chicken, and trails only the US and Brazil in beef, USDA data show.