Grain in Ear Meets the Year of the Monkey and the Month of the Horse: Let's Talk About Grain

At 13:49 today comes Grain in Ear, "the awned wheat must be harvested quickly, the awned rice can be planted." And this year, from Grain in Ear until just before Minor Heat on July 3, is the legendary "Year of the Monkey and Month of the Horse," so we might as well take this occasion to talk about those once-in-a-blue-moon matters concerning grain.

It is said that the "Year of the Monkey and Month of the Horse" cycle is 12 years, and the last time it appeared was in 2004. Coincidentally, the busy summer grain production we see now has seen bumper harvests since 2004, and by 2015 it had already had twelve consecutive years of bumper harvests. Who knows how things will go this year.

However, according to many netizens, there has been a lot of rain this year, and the harvest is not ideal.

Farmers worry not only about production but even more about prices. How so? As the state vigorously pursued policy-based grain purchases in recent years, the fiscal pressure suddenly seemed unbearable, and a supply-side reform plan was proposed. Simply put, farmers will have to learn to farm with an eye to the market from now on. This year, corn was first used as a reform pilot, and the results were fairly good. Many places reported that less corn was planted and other crops were grown instead.

Actually, from a professional point of view, corn was not the first pilot for reform. Soybeans and cotton had already implemented the target price subsidy policy ahead of it. Even earlier, the rapeseed variety that the state promoted to protect domestic oilseed and rapeseed production in the Yangtze River basin - rapeseed, the raw material for the rapeseed oil everyone eats - was already left to the market by the state as early as 2015.

Speaking of the state's policy-based protection of grain, there is a rather interesting phenomenon: on the one hand, farmers often report that when they sell grain they basically cannot get the state-set price; on the other hand, the state still has to spend a considerable portion of funds in the purchase and circulation links, especially in grain storage (see our previous reports for details).

An oil processing enterprise once said that before the temporary storage policy was abolished, enterprises only had to focus on purchasing, processing and storage. The state gave enterprises a processing fee of more than 200 yuan per ton, plus storage costs of 200 yuan/ton per year. Many enterprises relied on state subsidies to survive or even make profits. Especially in oil storage, a one-time investment in construction could bring lifelong returns; storing oil was almost a sure profit with no risk of loss.

I have digressed a bit. Let's go back to summer grain. How much can farmers actually earn from toiling away in the fields?

Let me give you a set of figures. Based on my years of experience, this set of data is still somewhat useful as a reference.

Cost of one mu of wheat

Plowing and sowing: 80 yuanSeed cost: 70 yuanFertilizer cost: 160 yuanIrrigation cost: 100 yuan

Pesticide cost: wheat weed control 10 yuan + three rounds of pest control 40 yuan = 50 yuanMechanical harvesting: 60 yuan

Total input cost per mu: 80+70+160+100+50+60=520 yuan.

If one mu yields only 500 jin, then 500*1.18-520=70 yuan.

If, ifthe yield per mu reaches 1000 jin,1000*1.18=1180 yuan-520 yuan=660 yuan.

In addition, corn prices have been relatively better in recent years. Basically, the income from planting wheat offsets the cost of planting corn, so the main income comes from corn. Calculating at 1000 jin per mu, if a family has 6 mu of land, the annual farming income is only around 6000 yuan.

Of course, this does not include labor costs. Even though working in the city earns a laborer at least 100 yuan/day, in the countryside, when you farm your own land and are told to go work in the fields, you just go work in the fields - there is no talk of wages. So rural people who have moved to the city basically do not want to farm anymore; each person's salary alone can match a family's several years of farming income.

Writing this, I cannot help but wonder: by the next Grain in Ear in the Year of the Monkey and the Month of the Horse, will there be no one left to farm?

Of course, this is all our unnecessary worrying. In a market economy, as long as there are profits, there will still be people who farm. The relevant state departments even set up a grain security committee. It is just unknown whether these people are the same ones who made the policies before.