China: A Challenge and an Opportunity

  • 01

    As part of the I-LEAD (Iowa Corn Leadership Enhancement and Development) Class VI, this past December I traveled to China and Hong Kong. We began our trip in Beijing, with stops in Shijiazhuang and Gaungzhou and ended up in Hong Kong.

  • 02

    I-LEAD was created by the Iowa Corn Growers’ Association and Iowa Corn Promotion Board. Its goal is to recruit men and women who are committed to agriculture and provide them with the tools needed to succeed as leaders. Our class of 21 comprises farmers and agribusiness leaders.

  • 03

    Our group had five objectives. Basically, we wanted to explore China’s ag market not only to learn about trends but how it impacts the U.S. We also wanted to explore growth opportunities and the challenges that lie ahead. We did this by visiting wet markets, hypermarkets, feed mills, a storage facility and a port.

  • 04

    The wet market we visited in Beijing is the largest wet market in the city with 500 sellers. 60,000 people shop there every day. There are a total of 1,260 wet markets in Beijing. Typically, the older generations purchase their groceries here.

  • 05

    The hypermarket is the new face of Chinese retail and where the younger generation tends to shop. It’s more of a super center along the lines of Wal-Mart and is typically three to four levels.

  • 06

    Machong port in Gaungzhou. This port received the first U.S. sorghum (feed for livestock) cargo in October 2013.

  • 07

    We visited a hog farm in Shijiazhuang, which is a farrow to finish facility. They have 550 sows and finish 10,000 hogs per year. They AI all of their sows.

  • 08

    We toured a swine expo in Gaungzhou, which had 300 vendors. This is the 36th year this expo has been taking place. Companies from all over the world attend.

  • 09

    Almost half of all Chinese live in urban areas and that number is expected to grow in the coming decades. China is putting up massive high-rise buildings to accommodate the growing number of people that are moving to the urban areas.

  • 10

    In fact, some predict that nearly 70% of Chinese will live in urban areas by 2035. Most of these will be concentrated in the east and in coastal cities. So it’s no surprise that 160 cities in China already have a population of more than 1 million people.

  • 11

    It’s causing a real problem in cities because the government can’t build high-rises fast enough. The government wants to control growth in the city but they’re not quite sure how to slow it down.

  • 12

    At 9.6 million sq. km. (3.7 million square miles), China is slightly larger than the United States, but because of the size of its population one hectare (about 2.47 acres) of arable land must feed 11 people, nearly twice that of the world average.

  • 13

    In the south, the average farm is between ¼ to ½ acre. In the north, the average farm is 3 to 5 acres. A family can’t sustain on this limited resource so many farmers have acquired jobs in he city. It’s estimated that more than half of a farm’s income comes from outside labor. Some farmers are simply walking away from the land because it’s not profitable.

  • 14

    We met with Bryan Lohmar with the U.S. Grains Council. Bryan has been in China for more than two decades and understands the culture very well.

  • 15

    China is working hard to develop a strong, local seed industry. It reportedly has invested more money on biotechnology than any other country in the world but has not taken the next step. Yet, their corn yields are only 60% of what we produce in the U.S. Their plant population is only 23,000 plants per acre.

  • 16

    One of the hot topics while were we there was China’s rejection of shipments of U.S. corn. It was also rumored that they were going to be rejecting loads of DDGs.

  • 17

    At the Gold Coin Feedmill, we were able to see corn that came from the U.S., which is pictured here. We were also shown corn from Argentina. Although we were not allowed to take pictures, all of the farmers in our group noted the extremely poor quality of the product. The representative from the company admitted that U.S. corn is much higher quality than others.

  • 18

    Sinograin, which is located in Gaungzhou near the Machong Port, is a state-owned enterprise, which plays a key role in carrying out state initiatives to ensure China's food security and economic growth. When the latest construction is completed by end of 2014, they will have the ability to handle 8.5 million metric tons of grain/year. They can currently handle 430 thousand metric tons.

  • 19

    Steve Wo, General Manager of Bester Foods, is a proponent of U.S. meat. He started Bester Foods this past year. He takes U.S. products right to the consumer to help them better understand the quality products we can offer China. Potential clients are shown how to properly prepare the meat as well as taste it.

  • 20

    According to the U.S. Meat Export Federation, beef imports from Australia are up 1000% year over year. The price of beef in China rose 34% last year and we’re not even talking about the good stuff! The potential income for beef imports from U.S. to China is $400 to $500 million per year.

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Take a tour of China's farm fields and cities, and learn about how changes underway there might affect the U.S.

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Will you have enough on-farm storage for harvest?

I just want to see the responses
49% (20 votes)
37% (15 votes)
Maybe, depending on yields
7% (3 votes)
No, it’s going to be a bin-buster
5% (2 votes)
No, I am looking at new bins or temporary storage
2% (1 vote)
Total votes: 41
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