Why has the price of corn fallen to 8 mao per jin? Farmers say they have worked for nothing

Staff at the purchasing point are testing the moisture level of the corn

“This year the price of corn has fallen to as low as 8 mao per jin. For several years now, the price of corn has never been as low as it is this year.” On the 28th, in the cornfield of Zhaizi Village, Huihe Town, Jiyang County, farmer Mr. Wang looked at the corn that was about to be harvested, but could not feel happy at all. It is understood that the low price of corn is mainly due to the impact of the state's macro-control policies.

A year of farming is not as good as a month of working away from home

The decline in corn prices is quite hard for farmers to accept, as they already struggle with the low returns from growing grain. “During the slack farming season I have always gone to Jinan to do short-term work, but during the busy farming season I have always had the habit of coming home to farm. But given this year's situation, next year I am not even planning to farm. One month's wages from working away from home are equal to a year's income from farming.” Mr. Wang complained.

There are many other farmers who feel the same way as Mr. Wang. On the asphalt road on the north side of the Hardware and Building Materials City, the reporter met Mr. Niu, a villager from Zhaohu Village, Jiyang Subdistrict Office, who was drying grain there. Mr. Niu told the reporter that because this year's corn purchase price is low, some people in the village are already preparing to store their grain and wait to sell it when the price rises.

But considering his large planting area, high tied-up capital, and the lack of storage space, Mr. Niu decided to sell the grain as soon as possible. “A combine harvester that directly produces corn cobs costs 100 yuan to harvest one mu. I planted 15 mu, so just the harvesting costs quite a lot. To save costs, after my wife and I picked the corn, we slowly peeled the husks ourselves with a machine.” Mr. Niu told the reporter.

Input and output are basically break-even; farmers work for nothing growing crops

During the interview, a villager from Zhaohu Village did an account for the reporter. “This year's grain harvest is abundant. I was originally quite happy. One mu yields more than 1000 jin, but at the current price, one mu only sells for about 800 yuan.

One mu needs 5 jin of seed for 60 yuan, plowing for 60 yuan, fertilizer for 150 yuan, watering twice for 60 yuan, pesticide spraying for 60 yuan, and a combine harvester costs another 100 yuan to harvest one mu. From sowing to harvesting, plus labor costs and fuel costs, the money from selling grain is only just enough to cover costs.”

Villagers nearby said one after another that at present the money for seeds and fertilizer is secondary; the main thing is that labor costs are expensive. “My husband and I both work away from home. For the few mu of land at home, we still have to ask for leave to come back, and the wages deducted are more than what one mu earns. We suffer the exhaustion and still do not make money. More than half a year has been worked for nothing, and I have no enthusiasm at all for farming. Next year I plan to contract out the land to save myself the worry.” Villager Ms. Li told the reporter.

Prices continue to fall; farmers rush to sell grain

On the afternoon of the 28th, at a corn purchasing point at the Gouwang intersection, the reporter saw that a corn purchaser was using professional instruments to measure the dryness and moisture level of the corn.

Purchaser Ms. Sun told the reporter that on that day the highest purchase price for corn at her purchasing point was 8 mao per jin, down by about 3 mao per jin from the same period last year. “I heard that in Northeast China the best corn purchase price is only 1 yuan per jin. The corn here produces less starch and is not as good in quality as Northeast corn, so the purchase price is even lower than there.”

A farmer surnamed Liu who came to sell grain told the reporter that in previous years he sold his grain directly to pig farmers, but this year the price offered by pig farmers is even lower than at the purchasing point. “Before the Mid-Autumn Festival, corn was still 8 mao 5 per jin, but in the past few days the price has dropped again.” Mr. Liu told the reporter.

Tong Jingzhong, a relevant person in charge of the Grain Bureau, told the reporter that the price of corn is mainly affected by supply and demand, and the price of corn in Jiyang is also affected by the corn price of the entire market.

In the near term, corn prices will show a continued downward trend

Monitoring data from the price monitoring department of the Jiyang County Price Bureau show that the highest per-unit yield of corn in Jiyang County reached more than 1600 jin/mu, and the low end was also 1200 jin/mu. But since new corn came onto the market, in just a few days, the corn purchase price in Jiyang County fell all the way from 0.95 yuan/jin to the current 0.85 yuan/jin, a decline of 10.5%, and there is still a trend of further decline. But even at such a low price, purchasing enterprises are still not very enthusiastic about buying.

The price monitoring department of the Price Bureau analyzed that the continuous decline in corn prices is related to the current period when new corn is concentrated on the market, and to the increase in corn planting area in Jiyang City this year, the relatively large output, and the significant increase in market supply.

Another reason is that demand for corn and its downstream products continues to be sluggish, prices of corn starch and alcohol continue to fall, and some enterprises have stopped production due to losses, further causing the depression in the corn market.

The rapid decline in corn prices also caught many purchasers off guard, and there even appeared a situation of “inversion” between purchase prices and dumping prices, with no profit to speak of at all. And as new corn comes onto the market one after another, farmers, with no hope of waiting for prices to rise and eager to clear warehouse space, sell in concentration, which further pushes down corn purchase prices.

“Along with the large-scale market arrival of new corn in our county, market supply has further increased. In the near term, corn prices will not stop falling and rebound in the short term, and will show a continued downward trend.” a staff member of the price monitoring department of the Price Bureau told the reporter.

It is understood that recently multiple national departments jointly issued the "Notice on Issues Concerning the National Temporary Storage Corn Purchase in Northeast China in 2015." The notice made clear that in 2015 the state would continue to implement the temporary corn purchase and storage policy in the three northeastern provinces and the Inner Mongolia Autonomous Region, and the listed purchase price for temporarily stored corn would be 1 yuan/jin. Regarding the impact of the relatively low listed purchase price in the state's 2015 temporary corn purchase and storage policy on corn prices in Jiyang County, relevant persons in charge all said, “Now the market dominates prices, so the policy impact is not great.”