What farmers plant depends on the market; saving on labor costs relies on cooperation

During the autumn harvest season, the reporter met Diao Jianjun again, a large-scale grain farmer in Diaozhuang Village, Xinhua Office, Linqing City, Shandong Province.

Last year, when corn prices were falling, Diao Jianjun sold several hundred mu of corn as silage corn to the local Runlin Livestock Company. While others who grew corn and sold it as grain lost money, he made over 70,000 yuan. How was Diao Jianjun's harvest this year? In Diao Jianjun's clean and spacious courtyard, he talked at length about his experience in growing grain.

Selling silage earns more than selling grain

"This year's market is even a bit worse than last year's, but I still made money," Diao Jianjun said. This year, when the corn was just harvested, the market price was disappointing. At around 8 jiao 1 fen per jin for corn kernels, he would definitely have lost money. But if sold as silage corn, there was still money to be made.

"Last year, silage corn was 1 jiao 5 fen per jin; this year it's 1 jiao 2 fen. Last year, my 190 mu of silage corn earned 70,000 yuan; this year the price was lower, and 500 mu of silage corn earned 50,000 yuan. The reason the silage corn price is low is that people saw silage corn was profitable and planted more, so the price naturally fell a bit."

Although he earned less than last year, Diao Jianjun was still quite content, because Lu Xutao, another large-scale grain farmer from Chenguanying Village, Daiwan Town, transferred 2,000 mu of land and planted all of it with corn this year, yet lost about 100 yuan per mu.

Asked about the reason for the loss, Diao Jianjun told the reporter it was mainly because Lu had not made up his mind at the start. With corn, if you decide to sell it as silage corn, you need to plant it densely; if you sell it as ordinary corn, you plant it at normal row and plant spacing. Lu Xutao did not plant densely, and sold it as silage corn, so he lost money. If he had sold it as ordinary corn, he would have lost even more.

From this, Diao Jianjun drew a conclusion: nowadays, not only in Linqing City, but in many places across the country, the livestock industry is developing. Linqing City's livestock inventory has increased greatly, creating huge demand for silage feed. Taking Runlin Livestock as an example, it consumes 20 mu of silage feed every day. Calculating for the whole city, the demand is enormous. Not just this year, but in the future too, growing silage corn will still make money.

Hiring cooperatives for farm work saves more money

In agriculture, large investment, long cycles and slow returns are headaches for many large-scale grain farmers. Many large-scale grain farmers, due to excessive investment, eventually had their capital chains break and had to exit. Diao Jianjun avoided this problem; his solution was to hire cooperatives for the work.

Diao Jianjun said that in order to save costs, he reached cooperation agreements with many cooperatives: apart from irrigation facilities, such as wells, power lines and submersible pumps, which require necessary investment and which he bought himself, everything else was handled by specialized cooperatives.

For fertilizer, he goes to a specialized agricultural input cooperative, where the price is cheaper and quality is guaranteed; seeds are delivered to his door by a seed cooperative, with quality and quantity assured. For sowing, he hires a specialized cooperative, which provides seeding equipment and labor, offering a "one-stop" service; for pest and disease control, a specialized cooperative handles it with equipment and labor; for harvesting, it is again managed by a specialized cooperative.

"Although hiring cooperatives also costs labor and equipment usage fees, compared with buying tens of thousands or even hundreds of thousands of yuan worth of agricultural equipment yourself, plus investing manpower and materials in maintenance and repairs, renting is far more cost-effective than buying."

On this point, Wei Lijun of the Linqing City Agriculture Bureau said: "Now, Linqing City's total agricultural machinery inventory has continued to grow rapidly for years in a row. The numbers of large and medium-sized tractors and combine harvesters have reached 4,332 and 3,315 respectively. Along with the growing scale of land transfer, farmers' professional cooperatives have also continued to emerge. Today the city has 1,365 registered farmers' cooperatives, with 42 newly registered in 2016. This provides the foundation for specialized services. Large-scale grain farmers save money, cooperatives make money, and for farmers this is a 'win-win,' and even more so a guarantee that agriculture is moving toward modernization."

No matter what you plant, it is best to have an "order"

After the corn harvest, Diao Jianjun already had a clear plan for what to plant.

"This year, of my 500 mu of land, 440 mu will be planted with high-quality wheat, 30 mu with scallions, and 30 mu with garlic. In addition, this year I also joined with several farmers to transfer 6,000 mu of land in several nearby villages, all planted with high-quality wheat. After harvesting the high-quality wheat, it will be sold to a flour mill in Gaotang at a price 5 fen per jin above the market price. This contract has already been signed."

Grain prices fluctuate and are trending downward. How can one ensure that farming does not lose money and still makes a profit? From practice, Diao Jianjun grasped a principle: first, grow high-quality grain; second, cooperate with big companies.

Diao Jianjun said that this year, the more than 6,000 mu of wheat planted were all high-quality strong-gluten wheat. "Now, high-quality flour is popular, and flour enterprises' demand for high-quality wheat is rising. So before planting high-quality wheat, we signed contracts with flour processing enterprises to buy at above-market prices, reducing risk, while also guaranteeing the enterprises' supply."

"Flour enterprises are also willing to sign contracts with large-scale grain farmers like us, because only when wheat is planted in contiguous plots can the purity of wheat pollination be ensured and the wheat variety be guaranteed. Otherwise, one patch here and one patch there, with different varieties, would become hybrid varieties, and quality could not be guaranteed," Diao Jianjun said.

Planting scallions and garlic was to spread risk. Diao Jianjun said: "The labor cost of growing garlic and scallions is very high, but the price cannot be predicted. It may be absurdly high, and even if the price is low, it will not fall too far."