Despite drought and a derecho, Iowa’s corn supply will be able to fill China’s shopping list, according to the Iowa State University Center for Agricultural and Rural Development.
“The recent derecho caused a great deal of damage to Iowa’s corn and soybeans, but total predicted national corn production for the 2020-21 marketing year is still the largest ever,” Dermot Hayes, professor of economics at Iowa State, said in a news release Wednesday.
“So, yes, the U.S. has the capability to deliver on China’s record-setting demand.”
Hayes, Xi He and Wendong Zhang predict China will purchase some $21.63 billion in agricultural products from the United States, all within the first year of the U.S.-China trade deal’s phase one.
That would be an jump of nearly $3 billion from what the three had anticipated in their study, “China’s Agricultural Imports under the Phase One Deal: Is Success Possible?,” published in May.
“Our prediction is still a little behind the $36.5 billion target, but recent market signals indicate that China has record demand for U.S. corn, poultry and pork,” Zhang said.
They tie China’s rise in demand for U.S. corn and pork to the African swine fever that has severely hampered China’s hog inventory.
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“It’s generally believed China has lost around 40 percent to 60 percent of its hogs since 2018,” He said.
“China’s surging corn imports as of now are driven by its feed demand while it rebuilds its hog inventory.”
Zhang estimated China will need about two years to repopulate its hog inventory.
Zhang added that, “If China continues developing its ethanol industry, the demand for U.S. corn will not slow down after its hog inventory is rebuilt.”