Corn temporary storage price cut for the first time in 7 years, many farmers holding onto their grain and waiting
In 2014, the state launched a pilot program of target price subsidies for soybeans in Northeast China and Inner Mongolia and for cotton in Xinjiang, abolishing the original temporary storage policy and letting the market determine the prices of these two types of agricultural products. Just one year after this policy was piloted, corn, which was still under the temporary storage policy, was pushed into the spotlight. On September 18 this year, the National Development and Reform Commission, the State Administration of Grain, the Ministry of Finance, the Agricultural Development Bank and other departments jointly issued a notice: the state temporary storage corn listed purchase price was set at 1 yuan/jin, at most 0.13 yuan per jin lower than last year's temporary storage price. This was the first time in the seven years since the corn temporary storage policy was implemented that the purchase price turned downward. So what impact has this cut in the corn temporary storage price actually brought? A reporter rushed to Gongzhuling City in Jilin Province, known as the “home of corn,” to investigate.
The grain broker's trip to sell grain at the granary had many twists and turns; corn prices are low, and farmers are unwilling to sell!
Grain broker Zheng San: The mold is really serious now, it's everywhere, moldy kernels, more or less, let's see if it exceeds (the standard).
In the price-listening room of Jinfeng Granary in Dayushu Town, Gongzhuling, grain broker Zheng San leaned motionless in front of the price-listening window, waiting for the fate of his two truckloads of corn from three shang of land to be settled. Whether it could smoothly pass the inspection threshold and fetch a good price was still unknown in his mind.
Just over ten minutes earlier, he had watched helplessly as a truckload of corn was rejected by the granary because the moldy kernels exceeded the standard, which added another worry for Zheng San; he was also unsure whether the two truckloads of corn he had collected met the standard. Once rejected, it would mean not only wasting a sum on transport costs for nothing, but also having to sell the shelled corn at a reduced price. Thinking of this, Zheng San, standing outside the price-listening window, became more and more uneasy.
In just the few short minutes while waiting for the result, Zheng San, who had originally only been standing outside the window, could not wait to stick his head into the small window. Not only was Zheng San anxious; the grain seller Jiang Jingchun was also unsure. The two of them stayed right by the price-listening window, waiting anxiously.
In order for the corn from more than three shang of land to fetch a good price, five hours earlier, at four in the morning, Zheng San had set out for the home of Jiang Jingchun, dozens of kilometers away, to prepare to sell grain.
Grain-selling household Jiang Jingchun: I sold at 0.85 yuan last year; how much is the difference?!
Zheng San: Don't even think about the price; the whole country has dropped, and it's not just you, it's nationwide.
In cases like Jiang Jingchun's household, where corn is piled directly on the ground in a “lying flat” manner after harvest, it is extremely prone to heating, molding and waste, which directly affects the final sale of the corn. After repeated consideration, Jiang Jingchun still decided to sell the more than 3 shang of corn at home as soon as possible. So he contacted Zheng San, who came to buy grain every year, and the two sides finally settled the deal at a price of 0.7 yuan.
The two sides finally settled the deal at a price of 0.7 yuan.
At 4:30 in the morning, the temperature in Northeast China had already dropped to minus 7 degrees, and the surface of the corn piled on the ground had formed a thick layer of frost, just like the sluggish corn market at that moment, making both Jiang Jingchun and Zheng San feel a chill.
Jiang Jingchun: Renting land is no good this year; the price has dropped. Last year when they came to rent my land, I was still joking. He said he wanted 10,000 yuan, and I said I would rent it for 10,000 yuan.
Zheng San: Are you still going to plant this time?
Jiang Jingchun: Like this, I won't do it anymore; I can't do it. Why would I rent it for 10,000 yuan? How much money can be left from farming?
Jiang Jingchun: Last year, one shang of land could produce at least 28,000 to 29,000 jin. This year, 24,000 to 25,000, a difference of four to five thousand jin.
Jiang Jingchun's corn production dropped somewhat this year because of the weather, and combined with the price cut, the profit was clearly not as good as last year.
Jiang Jingchun: At 0.7 yuan per jin, that's more than 18,000 yuan. After deducting more than 9,000 in costs, then another 8,000 to 10,000 yuan for renting land, count it as 8,000; at 10,000 yuan you would lose money.
Jiang Jingchun told us that after deducting various inputs such as fertilizer, labor, seeds and pesticides, this year he could still have a surplus of seven to eight thousand yuan per shang of land. But because his corn production dropped and the price also fell, overall this year's income per shang of land would be about 5,000 yuan less than last year. At 7:30 in the morning, after busying for more than 3 hours, Jiang Jingchun still had one last small portion of corn left to thresh. Looking at the corn in his own yard, Jiang Jingchun could not be happy at all.
Overall this year's income per shang of land would be about 5,000 yuan less than last year.
Reporter: Besides watching TV, what other channels have you had in past years for learning about grain prices?
Jiang Jingchun: This stuff follows the market; you go to the granary and ask. You run to a few granaries and ask. Which granary pays how much? That's it.
At 8:30 in the morning, all of Jiang Jingchun's corn had been loaded onto the truck. Half an hour later, the two vehicles arrived at the entrance of Jinfeng Granary in Dayushu Town. At this time there were still several days before the state listed purchase of corn, and some farmers coming to sell grain had already begun lining up at the granary entrance.
At 8:30 in the morning, some farmers coming to sell grain had already begun lining up at the granary entrance.
In the room just inside the granary entrance where people wait to hear the price, the corn had to go through measurements such as moisture content and the proportion of moldy kernels, ultimately calculating whether it met the standard and what price to give. Although Zheng San and Jiang Jingchun had already agreed on a price of 0.7 yuan, whether the granary could purchase the corn next and give a price in line with their expectations left both of them waiting anxiously.
Ten minutes later, the result came out.
Granary staff member: 0.775 yuan.
The price of 0.775 yuan far exceeded Zheng San and Jiang Jingchun's expectations. At 0.075 yuan more per jin, based on a yield of 25,000 jin of corn per shang of land, one shang of land could earn 1,875 yuan more. It seemed a big stone had finally dropped. But the meticulous Zheng San quickly discovered a problem on the grain-selling detail sheet, and the rare surprise was instantly doused with a basin of cold water.