The U.S. Grains Council's 2012 crop tour of Northeast China observed that China's corn acreage in this vital region has increased and that growing conditions through early June have been favorable. Northeast China accounts for roughly 40 percent of China's corn production and is the region best able to increase acreage to meet rising urban demand. Based on this preliminary assessment, the Council's crop tour team projects that China's total corn crop is on track to increase by 5-6 million metric tons (197-236 million bushels) above last year's bumper crop levels.
However, despite a record harvest last year and a strong 2012 crop in the ground, corn prices are up more than 10 percent in most parts of Northeast China compared to planting time last year. This reflects the continued robust growth of the Chinese middle class and surging food demand in urban areas. In addition, a severe wheat blight may reduce China's winter wheat harvest by up to 5 million metric tons, reducing feed wheat supplies available as a substitute for corn in feed rations. Any adverse weather events through the summer could swiftly exacerbate the supply situation.
China is the world's second leading corn producer, and its recent emergence as a major corn importer makes China a key factor on both the supply and demand side of the pricing equation. To provide U.S. producers and agribusinesses with independent data on current production, the U.S. Grains Council conducts annual crop assessments in China's major corn growing regions.