Northeast China corn temporary storage purchase meets lower grain prices, farmers reluctant to sell and taking a wait-and-see approach
On the 1st, the three northeastern provinces launched the 2015 national temporary storage corn purchase policy. Reporters saw at some purchase depots that autumn grain purchase funds were already in place, but few farmers had come to sell corn. Because the corn temporary storage price was lowered, farmers' income from selling grain decreased, and the price signal accelerated the adjustment of planting structure.
Corn purchase on the first day of launch was somewhat quiet
The Northeast corn harvest is nearing its end. Lanxi County Grain Depot Co., Ltd. in Heilongjiang Province is an entrusted purchase depot of the Zhaodong Directly Subordinate Depot of Sinograin. At this depot, reporters saw one large truck fully loaded with corn unloading grain, and not far away a golden pile of corn had formed a "small hill." After quality inspection, weighing, and other procedures, grain broker Li Guoan took the documents to the settlement center. The settlement clerk took the documents and bank card, tapped the keyboard, and transferred the money into Li Guoan's account.
Starting November 1, the three northeastern provinces and the Inner Mongolia Autonomous Region officially launched the 2015 national temporary storage corn purchase policy, ending on April 30, 2016. Compared with last year, this year's temporary storage corn purchase policy was launched about one month earlier, while the end time remained unchanged.
Changtu County, Tieling City, Liaoning Province, is a major national corn-growing county. On the first day of the launch of the corn temporary storage price, reporters came to the Changtu Directly Subordinate Depot of China Grain Reserves located in this county. Two bulletin boards for the 2015 national temporary storage corn purchase quality and price policy had already been hung outside, setting clear requirements for purchase price, test weight, moisture, and other factors. However, no farmers or grain brokers were seen coming to sell grain, and the temporary storage purchase site was somewhat quiet.
Guanfeng Agricultural Machinery Planting Professional Cooperative in Baicheng City, Jilin Province, planted 183 hectares of corn, which has now been fully harvested, with the courtyard filled with corn. Cooperative chairman Zhang Fenggang said that this year the state launched the corn temporary storage price early, and the maximum temperature is still above zero degrees Celsius, so corn threshing is likely to cause breakage, and therefore ordinary people are not in a hurry to sell corn.
Preliminary yield estimates by Jilin Province's agricultural department show that this year the province's total grain output is better than in an ordinary year and better than last year. Based on the adjustment of national policy-based grain purchase policy and analysis of the current grain market situation, Sinograin Heilongjiang Branch estimates that Heilongjiang Province's national temporary storage corn purchase volume will be between 22 million tons and 27 million tons.
Temporary storage price lowered, farmers face worries despite a bumper harvest
The corn temporary storage price, which had risen continuously for many years, was lowered this year, leading to varying degrees of decline in farmers' income from selling grain. This year Jilin Province's temporary storage corn purchase price was reduced by 0.12 yuan/jin compared with the previous year. If calculated according to Jilin Province's 2014 corn yield of 985.9 jin per mu, grain-growing farmers this year will see income reduced by 118.3 yuan per mu.
Zhao Huanhai, a major grain grower in Chaoyangpo Village, Chaoyangpo Town, Gongzhuling City, Jilin Province, who operates 750 mu of corn land, looked deeply worried when meeting reporters: "This year each mu produced more than 1,600 jin of corn, similar to last year, but corn prices fell, reducing income by more than 100 yuan per mu." Zhao Huanhai said that at the beginning of this year the land transfer fee per mu rose by 100 yuan, and "now it looks like breaking even would already be good."
Data from the agricultural department of Siping City, Jilin Province, show that this year Siping City's (including Gongzhuling City) total corn output is around 15 billion jin. Affected by factors such as the lowering of the national corn temporary storage price, farmers' grain-growing income for the year will decrease by more than 1 billion yuan.
Chen Libin, a major grain grower in Qujiadian Town, Changtu County, Liaoning Province, harvested about 4,200 tons of corn this year. He calculated an account for reporters: the comprehensive cost per mu of corn he operates is 1,100 yuan, including 700 yuan paid to farmers for land rent and 400 yuan in other operating costs; this year the average yield per mu is 1,400 jin. Compared with last year, this year's corn temporary storage price has been lowered somewhat, and quality requirements such as mold rate have been raised somewhat, compressing profit margins. On the first day of temporary storage, farmers were all "reluctant to sell and taking a wait-and-see approach."
In Heilongjiang, China's largest grain-producing province, the listed purchase price for national temporary storage corn is 1 yuan per market jin for standard-grade grain, 0.11 yuan per market jin lower than last year. The lowering of the temporary storage price has given new types of business entities plans to reduce the area planted with field crops. Li Deming, chairman of Zhenyu Corn Professional Cooperative in Lanxi County, Heilongjiang Province, said that this year more than 3,000 mu of corn were planted, the price is on the low side, and after deducting various costs it is only enough to break even. He had originally planned to expand the area of transferred land, but faced with the current price situation, he had to give up this idea.
Autumn grain purchase funds guaranteed to prevent "IOUs"
In response to the new situation in autumn grain purchase such as this year's downward grain prices, Jilin Province made arrangements in advance, requiring that farmers be allowed to sell grain as close to home as possible to reduce transportation expenses. This year the number of purchase depots in Jilin will be no less than last year, and major production cities and counties will have at least one depot per township, with depot locations arranged in place in one go.
Jilin Province also required strengthening policy publicity, improving services such as farmers' household grain storage and convenience services by purchasing and storage enterprises, and strengthening supervision and inspection and work safety. It will further do a good job in grain circulation, strengthen production and sales cooperation, play the "grain and soybean card" well, expand the "grain bank" pilot, and advance agricultural structural adjustment. It is reported that this year Jilin Province will complete the task of building 10 billion jin of warehouse capacity, and total warehouse capacity will reach 67 billion jin.
In terms of funds, this year's grain purchase funds are generally guaranteed. Reporters learned from the Heilongjiang Branch of the Agricultural Development Bank of China that the branch has raised 140 billion yuan to ensure the timely and full supply of credit funds for autumn grain purchase and prevent enterprises from issuing "IOUs" and farmers from facing "difficulty in selling grain."
Li Jun, deputy governor of the Heilongjiang Branch of the Agricultural Development Bank of China, said that Heilongjiang has another bumper harvest year this year, and the funds raised by the Agricultural Development Bank of China will promptly guarantee policy-based grain purchase and storage in Heilongjiang, ensure that "money waits for grain" during the autumn harvest, and ensure that farmers do not encounter "difficulty in selling grain" after a bumper harvest.