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China and World Corn Supply and Demand Nearby and in 10 Years Bryan Lohmar, China Country Director

China and World Corn Supply and Demand Nearby and in 10 Years Bryan Lohmar, China Country Director. May 16 th , 2013 2013 Global Pig Forum Wuhan, China. Outline. 2013 Global Pig Forum Wuhan, China. Nearby Market Corn Supply and Demand => 2012/13 and 2013/14 supply and demand

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China and World Corn Supply and Demand Nearby and in 10 Years Bryan Lohmar, China Country Director

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  1. China and WorldCorn Supply and DemandNearby and in 10 YearsBryan Lohmar, China Country Director May 16th, 2013 2013 Global Pig Forum Wuhan, China

  2. Outline 2013 Global Pig Forum Wuhan, China Nearby Market Corn Supply and Demand => 2012/13 and 2013/14 supply and demand => China, U.S., AUB Longer Term Trends => 10-year projections => China, U.S., AUB, ROW Other Issues Affecting Corn Supply in China => What is biotechnology? => What is food security?

  3. China’s Corn S&D in 2012/13 2013 Global Pig Forum Wuhan, China

  4. China’s Corn S&D in 2012/13 2013 Global Pig Forum Wuhan, China Private estimates Smaller production

  5. China’s Corn S&D in 2012/13 2013 Global Pig Forum Wuhan, China Private estimates Public estimates Larger production Smaller production

  6. China’s Corn S&D in 2012/13 2013 Global Pig Forum Wuhan, China Private estimates Public estimates Larger production Smaller production Smaller demand Larger demand

  7. China’s Corn S&D in 2012/13 2013 Global Pig Forum Wuhan, China Private estimates Public estimates Larger production Smaller production Smaller demand Larger demand End stocks going up (mostly imports) End stocks going down (despite imports)

  8. Take Home Points 2013 Global Pig Forum Wuhan, China Take Home Point #1 – Supply ≈ Demand => China’s corn production and consumption are at about the same levels Take Home Point #2 – Reserves => The role of reserves is more important to world markets, additional demand will be met by either reserve depletion or imports

  9. China’s Corn S&D in 2013/14 2013 Global Pig Forum Wuhan, China Production goes up 3-4 mmt => Increase due to area Demand goes up 8-17 mmt => Feed up 6-12 mmt =>FSI up 2-5 mmt Stocks go down 4-5 mmt => Despite imports of 6-7 mmt

  10. Corn Feed Demand Will Grow Faster than in the Past Decade • Protein meal inclusion growth rates will slow => Energy feed will grow as fast as protein meal going forward • Other energy feed inclusion rates will slow => Bran levels will remain steady and wheat inclusion will decrease • Together, these trends will cause corn feed demand to grow faster than total feed demand => In the last decade, corn feed demand grew slower than total feed demand

  11. The Inclusion Revolution has Reached its Conclusion 2013 Global Pig Forum Wuhan, China China’s Feed Production and Composition: 1993-2012 (mmt) Percent Protein Meal in 2003 is 19.2% Percent Protein Meal in 2012 is 25.8% Percent Protein Meal in 1993 is 8.6%

  12. The Amount of Non-Corn Energy Feed is Relatively Fixed 2013 Global Pig Forum Wuhan, China China’s Feed Production and Composition: 1993-2012 (mmt) Percent Other Energy in 2003 is 24.8% Percent Other Energy in 2012 is 22.3% Percent Other Energy in 1993 is 35.1%

  13. Even the Percent of Corn has Trended Down 2013 Global Pig Forum Wuhan, China China’s Feed Production and Composition: 1993-2012 (mmt) Percent Corn in 2003 is 55.9% Percent Corn in 2012 is 51.9% Percent Corn in 1993 is 56.3%

  14. Implications of Changing Compositionon Corn Feed Demand 2013 Global Pig Forum Wuhan, China Total feed ingredient demand grew by 4.5 percent over the period 2002-2012 3.5% 4% 4.5%

  15. Implications of Changing Compositionon Corn Feed Demand 2013 Global Pig Forum Wuhan, China Total feed ingredient demand grew by 4.5 percent over the period 2002-2012 3.5% 4% 4.5% Assume feed demand growth slows to: 4.0%over2012-2017 3.5% over 2017-2022

  16. Implications of Changing Compositionon Corn Feed Demand 2013 Global Pig Forum Wuhan, China Total feed ingredient demand grew by 4.5 percent over the period 2002-2012 3.5% 4% 4.5% Assume feed demand growth slows to: 4.0%over2012-2017 3.5% over 2017-2022 Corn demand will grow by 5.5% over 2012-2017 4.6% over 2017-2022

  17. U.S. Corn Export Supply in 2013/14 2013 Global Pig Forum Wuhan, China Large production increase! => Yields back to trend Exports double => Despite large increase in demand Stocks restored => 2.1 months use is average over last 30 years

  18. Planting is Late in 2013 2013 Global Pig Forum Wuhan, China

  19. Late Planting Can Affect Yields 2013 Global Pig Forum Wuhan, China The Relationship Between Late Planting and Yields in the U.S., 1980-2012* *Late planting defined as the number of days after May 10th that USDA declares 95% planting accomplished

  20. Late Planting Can Affect Yields 2013 Global Pig Forum Wuhan, China The Relationship Between Late Planting and Yields in the U.S., 1980-2012* 1984 2012 *Late planting defined as the number of days after May 10th that USDA declares 95% planting accomplished

  21. Yield Trends are More Important 2013 Global Pig Forum Wuhan, China Yield Trends in the U.S., 1980-2013

  22. Argentina, Ukraine, Brazil 2013 Global Pig Forum Wuhan, China World corn markets are more diversified than 10 years ago All three countries are now significant corn exporters Adequate stocks despite export program

  23. Long-term Projections are Tricky! 2013 Global Pig Forum Wuhan, China

  24. Yield Growth Expected to Continue 2013 Global Pig Forum Wuhan, China Actual and Projected YIELD Growth (mt/ha): 1990-2021

  25. Area Growth Expected to Continue 2013 Global Pig Forum Wuhan, China Actual and Projected AREA Growth (mha): 1990-2021

  26. Output Growth Expected to Continue 2013 Global Pig Forum Wuhan, China Actual and Projected PRODUCTION Growth (mMT): 1990-2021

  27. Issue: GMO Technology 2013 Global Pig Forum Wuhan, China • Many people do not understand GMO technology in China (and elsewhere!) => 36 percent of research scientists in China think Americans DO NOT eat GMO foods • GMO technology currently plays a significant role in China’s and the world’s food security => Food prices would be much higher without GMO crops => GMO technology could be even more critical to future world food security • The GMO debate should be based on science and reasonable facts, not misleading or false information

  28. Issues: Food Security 2013 Global Pig Forum Wuhan, China • China’s defines “food security” as “self sufficiency” (typically 95 percent) => If true, then I am not food secure, and neither are you! • Modern definitions emphasizes low income consumer’s access to sufficient food and nutrition => Over 30 percent of school children in central and western China are anemic, as are 50 percent of newborn babies => This is food security that can be resolved with lower priced pork!

  29. Conclusion 2013 Global Pig Forum Wuhan, China • China’s corn demand will likely be greater than domestic productionin coming years => The United Sates and other countries are expected to have ample surpluses to export • GMO technology is serious and could improve food security not only for China but also the world => Discussion of GMO technology should be taken more seriously

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