These and other questions in the Chinese grain belt were explored last week by a U.S. Grains Council survey team which got a firsthand look at the rapid progress of Chinese agriculture racing to meet surging domestic demand.

Kansas Corn Commission communications specialist, DeEtta Bohling of Ottawa, Kan., returned Saturday from China, where she surveyed the corn growing conditions and studied the Chinese government policies that affect acreage, marketing and demand. Bohling joined participants from six other states on the 2011 U.S. Grains Council (UCGC) Corn Tour which met with farmers, traders and provincial officials in the northeastern China provinces of Heilongjiang and Jilin, both major corn producing areas.

"Private and government storage facilities are prevalent throughout both provinces. Farmers have sold most of their production at harvest. Private facilities have low inventories held for private traders. Speculation is that government storage of corn is at low levels but there is no effective way to measure it," said Bohling.

Heilongjiang and Jilin provinces each produced 22 million metric tons (866 million bushels) of corn in 2010. Roughly half of the harvest was consumed locally. The remainder was sold and shipped to southern provinces where there is higher population density and feed consumption.

Corn planting acreage for 2011 is expected to generally increase marginally as farmers experienced good prices in 2010 with increased demand. While some increased corn acres have come from wheat and soybean acreage, there is also increased competition for fruits and vegetables, particularly near urban areas. Some land was unplanted and attributed to increased urban encroachment.

"China continues to balance many contending factors such as modern technology, information technology, increasing mechanization and the aging agricultural labor force. There is a vast exodus of young people to the city. We witnessed land loss due to urbanization," said Floyd Gaibler, USGC director of trade policy, who accompanied the group.

In both Heilongjiang and Jilin provinces, emergence is behind normal levels due to rainy weather and low temperatures. The team also observed that germination was spotty in some locations with skipped spaces and an occurrence of hand replanting.

While in China, the seven-member delegation also met with several corn farmers, trade partners and end-users. The group visited grain storage facilities including Heilongjiang Zhaodong Xiangyang Grain Storage and Sinograins storage facility. Visits were also made to COFCO Bio-Energy Co., Ltd., an industrial processor; Jilin Fuyu Xian Fu Guo Grains Trading Co.; Jilin Henong Animal Husbandry Group Co., Ltd., the largest commercial feed company in Northeast China; and the Heilongjiang Shuangcheng Modern Agricultural Science and Technology Demonstration Field. The delegation also had the opportunity to speak with farmers who run small hog farm operations, using a modern corn-soy ration for feed.

"Hog prices are at historically high levels in both provinces. Backyard feed hog feeding is declining and feeding operations are increasing in size. High corn prices are affecting profits. There are concerns of new foot and mouth disease variants and could lower demand for soybean meal and corn," reported Bohling.

Other members of the mission included Gary Schmalshof from the Illinois Corn Marketing Board; Dick Gallagher of the Iowa Corn Promotion Board; Ken Kindler from Dow AgroSciences LLC; Tom Gillis from the Wisconsin Corn Promotion Board; Dennis Gengenbach from the Nebraska Corn Board; and Lori Feltis of the Minnesota Corn Research and Promotion Council. The delegation was escorted by Council staff Dick Kasting, director of strategic relations, and Floyd Gaibler, director of trade policy.