This article is from WeChat official account:Interface News (ID: wowjiemian), reporter: Liu Lin, caption picture from: Visual China

On the first trading day after the long holiday, the domestic corn futures price gapped and opened. It once rose to 2550 yuan/ton during the trading day. The settlement price of 2525 yuan/ton on the same day also approached the historical high of 2564 yuan/ton; echoing this What’s more, the corn spot market during the long holiday is also rising.

At present, the major corn producing areas have entered the harvest period, new grains have been listed one after another, and the opening price has generally risen. From North China to Northeast, the purchase price of new corn of large and small acquisition entities such as grain merchants, deep processing enterprises, and China National Grain has increased over the same period last year. The purchase price of tidal grain corn in some areas even broke the local purchase record for three to four hundred yuan.

The rising trend of corn prices has lasted for 4 years and has accelerated since late March 2020. As of October 10, 2020, the average spot corn price was 2396.98 yuan/ton. Compared with the bottom of February 2017, the price of corn per ton increased by more than 800 yuan, an increase of 51%; compared with the end of 2019, it increased by 450 yuan , An increase of 25%.

As the most productive food crop in my country, the price change of corn will also be transmitted to the outside:

  • Other food prices have also risen. The monthly year-on-year growth rate of wheat and rice prices ended in April and May successively with negative growth that lasted for decades, and accelerated their rise in August;

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  • The price of compound feed has also generally risen.(Editor’s note: The so-called compound feed refers to the scientific formula of feed from multiple sources. The feed is evenly mixed and produced in accordance with the prescribed technological process), the price of main feed varieties in August compared with the same period last yearUp 4.4%～7.1%;

  • The prices of downstream products of corn processing, such as starch and alcohol, have risen even more. The price of corn starch has increased by about 14% year-on-year in August, and the price of corn alcohol has increased by about 22% year-on-year in September.

The impact of corn price is so far-reaching, how will it be interpreted in the future? As the biggest risk point of domestic corn supply, how much is the impact of typhoon disaster in Northeast China? From the perspective of corn supply and demand, will the four-year price increase trend continue? In the face of rising corn prices, will there be fast and powerful policies to be introduced?

How severe is the reduction in corn production caused by the typhoon?

my country’s corn is being harvested one after another. What is the harvest this year? Northeast corn producing areas are the biggest uncertain factor.

Northeast China is the largest corn producing area in my country. Jiemian News combed through the corn sown area of ​​various provinces, municipalities and autonomous regions announced by the National Bureau of Statistics and found that since 2007, the proportion of the corn sown area of ​​Hei, Kyrgyzstan, Mongolia, and Liaoning in the country has been increasing. Only in 2016 there was a short-term correction. The proportion of provinces in the country has exceeded 40%. Among them, as the country’s largest corn planting province, Heilongjiang accounts for 15% of the country’s sown area; Jilin, Inner Mongolia and Liaoning account for 10%, 8.9% and 6.4%, respectively.

As the autumn crop is approaching the harvest season, the Northeast has been hit by three typhoons in a row, which is not recorded in history. On the morning of August 27, typhoon “Bavi” landed on the coast of North Ping An Road near the border between China and North Korea; at noon on September 3, typhoon “Mesak” entered Yanbian, Jilin via the Korean peninsula; on September 7, typhoon “Poseidon” “It landed on the coast of South Gyeongsang Province in South Korea and entered Jilin in the early morning of the 8th.

The reduction in corn production in Northeast China is inevitable. The crux of the problem is how much has been reduced?

After the disaster, the market generally expects that the corn output will be reduced by a large margin, and some institutions expect a reduction of more than 10 million tons.(Compared with the annual output of 110 million tons in the four northeastern provinces, the reduction is about 10%), some research team expects to reduce production by 20%. So far, the damage may not be so bad.

Even Heilongjiang Province, which is most affected by the typhoon, has been affected only slightly. The post-disaster survey by the Department of Agriculture and Rural Affairs of Heilongjiang Province showed that the three typhoons were mainly caused by the greater impact of “Mesaq”, and some plots fell; the area affected by the corn was small, and the affected areas were mainly concentrated in some cities and counties such as Harbin, Qiqihar, Suihua and Daqing; The degree of damage is light, and the lodging corn is mostly inclined, and the proportion of root breaks, stem breaks, and ears on the ground is small.

The assessment of the disaster by experts organized by the Ministry of Agriculture and Rural Affairs of the typhoon showed that since corn has entered the waxy maturity period, the impact of lodging on yield is limited. According to the October agricultural product supply and demand analysis released by the Information Center of the Ministry of Agriculture and Rural Affairs, the forecast of China’s corn output in 2020/21 is consistent with September, only 1.8 million tons lower than August.

The market initially expected a large reduction in production, which may be related to the survey sample. The interface news research found that the damage situation in different regions of Northeast China is different, and the feelings of growers are also quite different. Even growers in the same county have different feelings about the impact of the disaster.

“The vitality of corn is very strong. As long as there is a little connection, the nutrition of the whole plant is transmitted.” Zhang Shuchun, director of the Agricultural Technology Extension Center of Beilin District, Suihua City, held a meeting in Heilongjiang Provincial Department of Agriculture and Rural Affairs on September 16 “As long as the part of the food we harvest does not sag on the ground and mildew does not occur, there will still be dry matter in the supply.”

From public information, even in Heilongjiang, the worst-hit region, the percentage of inversions is not very large. Cao Jingsheng, a researcher from the Maize Institute of Heilongjiang Academy of Agricultural Sciences, revealed at the above-mentioned press conference that the lodging area of ​​corn in the province is several million mu (Editor’s note: Heilongjiang corn sown area is more than 6000 Ten thousand acres), inversion accounts for about 10% of lodging.

Agricultural disaster relief measures are also expected to be effective in reducing losses. Lodging and rushing to harvest once became the top priority of the agricultural departments at all levels in the Northeast. Finance also provided support for the modification of harvesting machinery and the purchase of agricultural machinery. On September 23, the Ministry of Agriculture and Rural Affairs held the Northeast Lodging Corn Mechanization Work Conference in Siping City, Jilin Province, requiring that the Northeast lodging grain crops be harvested and returned to warehouses with minimal losses. There must be no situation where the lodging grain crops cannot be harvested.

However, I rushed to collectThe results depend on the drainage of the farmland. If the drainage is not satisfactory, not only the machinery is difficult to operate because the soil is muddy, but also the corn that is close to the ground and even soaked in water is prone to mildew.

It should also be pointed out that at the end of August, the Heilongjiang Provincial Bureau of National Statistics of the Heilongjiang Department of Agriculture and Rural Affairs conducted a survey of 18 counties with different accumulative temperatures. (City, District) has conducted field surveys to measure production. This year, corn production has increased in a large area, with an increase in yield per unit of 8%. This can offset the negative impact of disasters to a certain extent.

If it is further enlarged to the national level, considering other producing areas, the overall corn harvest this year will be less affected. For Shandong Province, the country’s third largest corn sown area, Li Zongxin, a researcher at the Corn Research Institute of Shandong Academy of Agricultural Sciences, told Jiemian News:

“This year’s growth can be said to be the best year in recent years. The unit yield and total output are expected to increase substantially. First, the weather conditions this year are relatively suitable. Second, the key technologies are basically in place. , Third, the corn planting area is relatively stable, even a little more than last year.”

The price increase of corn has been going on for four years, will it continue?

Although the impact of the Northeast disaster is not as severe as expected, the overall situation is still not optimistic.

From a fundamental point of view, the general direction of corn price increase is difficult to change. Since the beginning of this year, the contradiction between the supply and demand pattern of corn, which has become tense, will become more prominent. The gap between production and demand will further increase, while the inventory is further declining.

The increase in domestic consumption is expected to far exceed the increase in corn production. The information center of the Ministry of Agriculture and Rural Affairs predicts that the corn output in 2020/21 will reach 265 million tons, which is an increase of 4 million tons from 2019. However, the forecast value of domestic corn consumption in 2020/21 has increased nearly compared to 2019/20. 10 million tons, of which 90% comes from feed, the production and demand gap is expected to reach 23.46 million tons. (Editor’s note: The corn market year is from October of the current year to September of the next year)

Domestic corn stocks have dropped to the lowest level in eight years. Since the start of corn destocking in 2016, domestic corn stocks have continued to decrease. China Huiyi.com expects that the ending stocks of corn in 2020/21 will be 94 million tons, a decrease of 45 million tons from 2019/20 and 259 million tons of inventory in 2016 Compared with the peak value, it has been reduced by 64%, and the corn stock consumption ratio (year-end inventory/consumption) has also dropped from the 2015 peak value of 118.92% 31.1%.

In the past three years, the national temporary reserve of corn, which has become an important force to make up for the gap between corn supply and demand, may have basically bottomed out the stocks accumulated before the guarantee purchase policy was cancelled in 2016. Although the official has not released specific inventory data, we can get a glimpse of it from the public information of the temporary reserve auction. In the national temporary storage corn auction on August 27, the 2016 and 2018 targets have already appeared; in the subsequent auction on September 3, all the targets were 2016 and 2018.

In this context, we may use more international markets. According to data from the US Department of Agriculture, China has signed a contract to purchase 9 million tons of US corn delivered in 2020/21. This is not only the implementation of the first phase of the Sino-US trade agreement at the beginning of the year, but it can also make up for the corn supply and demand gap to a certain extent.

Since this year, my country’s corn imports have increased substantially, setting a record high since statistics. From January to August, corn imports were 5.59 million tons, a year-on-year increase of 50%. The 7.2 million tons of corn import quota set in 2004 is likely to be broken for the first time. Previously, although my country has changed from a net exporter of corn to a net importer of corn since 2010, the annual corn import scale was less than 4 million tons in most cases.

The influence of the international market on the domestic corn market continues to increase. If we do not consider the consumption of stocks, the self-sufficiency rate of corn in China in the past five years (domestic production of the year/domestic consumption of the year) has continued to decline. The self-sufficiency rate calculated by the annual market value published by the Ministry has dropped from 1.18 in 2014 to 94% in 2018. Taking into account the relative changes in production and demand in 2019 and 2020, this level of self-sufficiency may have dropped to around 90% , Even lower.

In the context of the global epidemic, although some countries have restricted food exports, as far as corn is concerned, global corn production and trade are still expanding and have not been significantly affected. Forecast data released by the U.S. Department of Agriculture in October showed that global corn production and trade volume in 2020/21 will continue to rise, increasing by 42.5 million tons and 17.3 million tons respectively from the previous year. The international corn price once fell sharply year-on-year due to the global economic contraction, and has now returned to the same period last year.

Although the domestic and international corn spot price difference exceeds RMB 1,000 per ton, this price difference is unlikely to have a significant impact on domestic prices under the constraints of the import quota system. Since late September, the CIF corn price (the tariff used in this indicator is the tariff within the quota, and the quota tax rate for corn is 1%) Fast approaching the average spot price, even slightly higher than the average spot price after the long holiday. Once corn imports exceed the quota of 7.2 million tons, an additional 65% import tariff becomes a gap.

As the price of corn rises, part of the feed and industrial demand for corn may shift to grains such as rice, wheat, sorghum and barley. This can restrain the increase in corn prices to a certain extent.

my country’s rice and wheat inventories have been rising for seven or eight consecutive years, and the inventory levels have reached a record high. The combined consumption ratio of the two has exceeded 1. In other words, the current stocks of rice and wheat can at least meet the domestic consumption demand for one year. Although this has met or even exceeded the needs of food security, under the increasing pressure of aging grains, we now need to consider more of the stocks. Digest. The sharp increase in corn prices provides an opportunity for this.

I want to stabilize corn prices, what can the policy do?

Considering that the decision-making level has a high tolerance for price increases, the policy of increasing supply and suppressing demand may be introduced later than market expectations, and the policy strength may be relatively light.

Han Changfu, Minister of Agriculture and Rural Affairs, clearly stated in an interview on September 23, “The current food prices are still low. Over the past 40 years of reform and opening up, the average income of urban residents has increased by more than 100 times, and food prices have not risen. “10 times”, “we should take a comprehensive and rational view of the reasonable rise in food prices.” Compared with the peak of 2,714 yuan/ton during the previous round of corn price increases, the average corn spot price is still more than 300 yuan lower.

Even so, we still need to make good policy reserves.

In terms of supply, the easiest and fastest way is to increase corn imports, but this is not a long-term solution. The self-sufficiency rate of corn still needs to be kept at a safe level.

Under the requirements of self-sufficiency in corn, it may be considered to increase imports of substitutes such as sorghum and barley. Both sorghum and barley can replace corn to some extent in feed and industrial uses. The annual output of sorghum and barley in my country is small (only about 3 million tons and 900,000 tons, respectively), which consumes less food and consumes less in China. The proportion of the output is about 22% and 15% respectively. (2017), except for seed use, other parts are used for feed and industry, mainly Satisfaction through imports, the annual import scale is greatly affected by policies and the domestic market.

In 2019, the imports of sorghum and barley were 830,000 tons and 5.93 million tons, respectively, which were 9.86 million tons and 4.8 million tons less than the peak in 2015. Since the beginning of this year, imports of sorghum have soared and the decline of barley imports has narrowed. From January to August, sorghum imports increased by 428% year-on-year and barley decreased by 12% year-on-year. The cumulative import scale of the two in the first eight months was still 58% less than the same period in 2015 And 56%.

It should be pointed out that miscellaneous grains such as sorghum, barley, etc., as supplements to staple foods will not hinder food security. The grains mentioned in my country’s new food security concept of “ensure the basic self-sufficiency of grains and the absolute safety of rations” mainly refer to rice, wheat, and corn(2019 The total annual output of the three accounts for 98% of the cereals) , the rations are only rice and wheat. In the white paper “China’s Food Security” released in October 2019, it only mentioned in general terms “the development of potatoes, beans, grains and other crops according to local conditions.”

There is also a view that increasing producer subsidies can increase the corn planting area. However, my country’s corn sown area has been the largest in the world since 2013, even surpassing the United States, which has the largest corn production in the world. In 2018, China’s corn sown area exceeded that of the United States by 17%, but the yield per unit area was 45% less than that of the United States, and the total output was only 74% of that of the United States.

Increasing the planting area is not as good as increasing the yield of corn. According to a simple estimate of the corn yield in 2019, if the yield is increased by 2%It can increase by 5 million tons, an increase of 5 percentage points can make up for the current gap in production and demand. This is still technically possible. In addition to the 8% increase in the yield per unit in the Heilongjiang survey mentioned above, the super-high-yield maize variety MC670 harvested this year from the demonstration field of Xinjiang Qitai General Field also increased the maize yield record by 9.6% to 1663.25 kg.

Considering that the increase in corn prices will also attract growers to increase the corn sown area, if the subsidy is increased, this is likely to further squeeze out soybeans, which originally had a relatively small sown area. If calculated using the unified caliber of the United States Department of Agriculture, the sown area of ​​soybeans in China in 2019 is only 23% of that of US soybeans and 19% of that of Chinese corn.

Moreover, there are some problems in the subsidy policy for corn producers. On the one hand, the producer’s specific subsidy amount is only announced at the autumn harvest, which reduces the policy’s influence on the decision-making of the sowing category that year. On the other hand, this system also has certain problems in terms of fairness. Due to the widespread existence of land transfers, sometimes the producers who receive subsidies are not producers; this subsidy policy specifically for the Northeast region is not for all local corn growers. Under the established total subsidy, growers need to propose Application. In the research conducted by Jiemian News, it was found that sometimes in two adjacent corn farms, one grower has producer subsidies, but one does not.

From the perspective of policy continuity, 2020 is the last year that the Ministry of Agriculture and Rural Affairs will reduce the planting area of ​​50 million mu of grain corn in the “Sickle Bay” area. It is difficult to increase the planting area as soon as the reduction target is achieved. , The corn planting area is expected to remain stable. According to the “Guiding Opinions on the Adjustment of Corn Structure in the “Sickle Bend” Area” issued by the Ministry of Agriculture in November 2015, “strive to stabilize the corn planting area in the “Sickle Bend” area at 100 million mu, which is 50 million less than the current level. More than acres, focus on the development of silage corn, soybeans, high-quality forage grass, miscellaneous grains and beans, spring wheat, economic trees and fruits, and ecologically functional plants.”

The so-called “sickle bend” areas include the cold and cool northeast area(reduction of more than 10 million mu) and the northern agricultural and pastoral zone(Reduce more than 30 million mu), Northwest Sandstorm and Arid Area(Reduce 5 million Mu), the area along the Taihang Mountain (reduction of 2 million mu) and Southwest Rock