China's corn revolution promises great leap forward in yields

November 18, 2012

RECORDER REPORT

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China's farmers are using higher-yielding seeds and embracing modern technology in a shift that makes it less likely China will be a long-term major corn importer. Record Chinese imports of 5.5 million tonnes in 2011-12 helped drive up benchmark Chicago corn prices to $8 a bushel earlier this year - more than double the average of the past decade - and raised the prospect of the world's second-biggest consumer becoming dependent on big overseas purchases.

But the government, which has always pushed for self-sufficiency in what is also the world's No 2 corn producing nation, has approved the use of more hybrid seed varieties and given more money to state farming institutions. With new hybrid seeds, some farms in China's north-eastern grain belt are already matching corn yields in the US Midwest, around double the average Chinese production of 5 tonnes per hectare. China's corn crop is forecast at a record 200 million tonnes this year, according to the US Department of Agriculture, and imports are expected to tumble.

"My view is that within the next 7-10 years the gap in terms of demand and supply will probably be reduced to close to zero if the technology can reach the farmer," said Diego Diz, China corn marketing lead for Monsanto. A sizeable reduction in China's imports could leave big exporters such as the United States and Argentina with no ready alternative outlets, analysts said, as there's little or no growth in demand elsewhere.

"China might not emerge as a major corn importer given efforts to boost yields," said Abah Ofon, a commodities analyst at Standard Chartered. "But they'll remain opportunistic buyers, taking US corn as and when the price is low." Seed firms such as Monsanto Co, DuPont Pioneer, Syngenta AG and their Chinese joint venture partners are set to roll out more drought-, pest- and weed-resistant hybrids, with a focus on tougher stalks and roots needed for mechanised harvesting and more intensive planting.

Better management of pests and weeds, which can cost up to a fifth of the crop, is boosting yield gains, said Diz, adding that teaching farmers not to harvest their corn too early could boost yields by another 7-10 percent. "China's corn farming practice is at a turning point," said Haiquan Zhang, chief China representative of Germany-based KWS SAAT AG, one of the world's top plant breeding firms.

The scale of China's challenge to meet surging demand for meat, and the corn to feed the animals, is enormous. "Over the next 15 years, China needs 80-100 million tonnes of corn, additional corn, a year," said Hardeep Grewal, Syngenta's head of corn marketing for Asia-Pacific. "It means yields have to go up 50-60 percent." Farmers in Heilongjiang, which borders neighbouring Russia, have expanded their corn fields further north, helped by seeds that mature early, offering high yields in a shorter growing period, local farmers said. "There are better returns from corn and farmers are willing to invest more in machinery," said Zhou Changchun, a technician from Gongqing farm. "Corn output in the past 4-5 years has started to pick up, thanks to early matured seeds."

DuPont Pioneer's Xianyu 335 hybrid seed has proved popular in the region, said farmers and a Beijing-based US grains industry official, who noted that early planting yielded 10-20 percent more than other hybrids. Hybrid Yunrui 8, which has resistance to ear rot and storage pests and performs well under drought, yields about 7.5 tonnes per hectare, said B.M. Prasanna, director of the International Maize and Wheat Improvement Center's global maize programme. The Mexico-based centre is closely working with Chinese seed firms and state agricultural institutes, drawing on a gene bank of 27,000 samples of domesticated and wild corn varieties.