- [Narrator] China imported over $5 billion
of U.S. corn last year
even though it's the world's second largest producer
of the crop.
The world's top producer is the U.S.
And most of the corn these countries are producing
isn't even eaten by people.
About 75% of China's corn and 40% of the U.S.'
is used for animal feed.
Livestock get fatter when they're fed corn,
and China's growing middle class
is eating more and more meat.
China now needs about 250 million metric tons
of corn per year.
So much corn that it has to import millions of tons
from other countries.
And now China has begun working to cut its reliance
on foreign corn, particularly from the U.S.
- Any country that's trying to maintain livestock,
be it cows, pigs, what have you, they need to have corn.
- [Narrator] But China's farms like far behind the U.S.,
which is a major concern for its food security.
Here's why growing its own grains
has been such a struggle for China
and how it's been trying to wean itself off U.S. corn,
which could leave a significant gap
in America's export market.
U.S. farmers are much more successful at growing corn
than their counterparts in China.
The U.S. department of agriculture estimates
that China's corn fields
yielded less than three tons per acre last year
versus nearly five in the U.S.
- It's widely believed from the folks that I talked to
that the U.S. has the superior soil,
the superior farming techniques.
- [Narrator] The U.S. has significantly more arable land
than China, and the arable land that China does have
is decreasing due to urbanization.
China's soil is also heavily polluted.
A 2014 report found nearly 1/5 of the country's arable land
was contaminated with heavy metals.
China is currently conducting a national soil survey
to see the extent of the issue.
A second key advantage for U.S. farmers
is their growing practices.
To try and grow more,
Chinese farmers use massive amounts of fertilizer,
more than four times the global average.
Many Chinese farmers are using fertilizer inefficiently
and polluting the larger ecosystem in the process.
A third issue for Chinese farmers,
their seeds are about 20 years behind U.S. technology.
Many in China are suspicious of genetically modified crops,
but the government has worked
to overcome that skepticism.
Even in its recent push
to embrace genetically modified corn,
China only allowed a tiny fraction of its corn fields
to be planted with genetically modified seeds,
according to reports.
So China has turned to the U.S. for corn.
While its banned domestic farmers
from growing genetically modified corn
due to public opposition,
China has still imported genetically modified corn
to feed animals.
But as tensions have escalated between the two countries,
China has put more effort
into finding alternative trade partners to get the resource,
adding competition to the market.
- They're in the process of setting up
kind of their own trade network
that can support their population and their economy,
and do so in a way where they're free of U.S. influence,
free of Western influence in general.
- [Narrator] Namely, this means turning to Brazil,
which is right behind the U.S. and China
when it comes to corn production.
- For China, they're in the process of seeking out
the countries that can handle their demand,
and which is why Brazil is a key partner
that they're developing a stronger partnership with.
It's because Brazil is able to grow
as a corn-producing country,
and they see that growth as supportive
for their demand going forward.
- [Narrator] For a long time,
Brazil was known for having a volatile corn supply,
but the country's now producing far more corn
than ever before, increasing how many acres are planted
and growing a second crop of corn
after farmers harvest soybeans.
It hasn't had to do everything on its own.
Foreign businesses have been investing
in Brazil's agriculture for decades.
Chinese companies have spent billions
to get involved in the growing Latin American market
and everything from seeds to processing and transportation.
Things have shifted even further since the war in Ukraine.
For years, China was getting lots of its corn there.
Ukraine is one of the world's largest corn producers,
but its corn production has fallen significantly
in the past few years.
The war has made it harder for farmers
to get financing for corn seeds and fertilizer,
and some farmland has been unusable
due to occupation or mines.
So China has doubled down on its relationship with Brazil.
Last year, China signed an agreement
to allow significantly more corn imports from the country.
The result, Brazil may surpass the U.S.
in corn exports this year.
- Brazil is receiving increased market share of exports
that used to be in the U.S.' domain.
There's competitions for prices,
who has the most competitive prices,
and Brazil often wins that.
- [Narrator] Because Brazil still has lots of room
to expand its corn growing acreage,
it could soon surpass the U.S. in corn production.
- There's a lot of room to grow,
and that's what they're doing.
They're aggressively growing.
- [Narrator] This could pose significant competition
for the U.S., especially in light of other circumstances
facing the country's corn market.
The U.S. is currently facing a trade dispute
with its second biggest corn customer, Mexico,
which plans to ban genetically modified corn
by the end of 2023.
The country says this is to preserve
heirloom varieties of corn that grow domestically,
but it's a big deal since more than 90% of U.S. grown corn
is genetically modified.
- Export markets are always a top concern.
If China is no longer purchasing
or exports in general are to drop off,
then the price that farmers are gonna receive
at the grain elevators for their crop
have the potential to sink.
For farmers that are already operating
on really thin margins, that's very difficult.
And a lot of times when this kind of thing happens,
there's some farmers that simply cannot overcome that.
- [Narrator] U.S. farmers could potentially sell more corn
to ethanol plants that could use it to make fuel,
but losing the export market
could significantly lower prices.
- They wouldn't be able to cover the amount of volume
that China and exports in general take up
from the U.S. producers.
They wouldn't be able to cover that
just through ethanol alone.
- [Narrator] Ultimately, China aims to grow
all the basic grains it needs,
whether that's corn, wheat, rice, or soybeans.
But corn is just one crop
where China's crop production falls short.
The country also relies on foreign soybeans.
It imported over $16 billion worth from the U.S. last year.
Soybeans and corn often grow on the same land,
but corn is more productive.
China's average soybean yield per acre
is less than 1/3 that of corn, and is about 40% less
than the United States' average soybean yield
for the same plot.
Some Chinese researchers have been urging farmers
to adopt new planting methods
that could allow them to grow both soy and corn,
but they worry farmers prefer
to just stick with what they're already doing.
Experts believe China could grow self-sufficient
in corn production by the end of the decade.
The recombination of better planting practices,
using cornbread to maximize growth,
and improving the soil quality.
But that would require embracing new technology
and farmer education.
- They would have to grow significantly more
in order to be self-sufficient the way that the U.S. is,
and they would have a long way to go to do that.
- [Narrator] For the foreseeable future,
China will probably need to keep importing
large amounts of corn if it wants to keep using it
in animal feed,
but soon, that may no longer mean buying from the U.S.
- China is in the position
where they don't have enough to feed their people,
which is why they import from outside.
And they've been reliant on us
as the primary corn producer in the world
even if they really don't want to do business with us.
That's why they're building trade agreements
that you can essentially go around the U.S.
The U.S. doesn't really have an alternative to China
in terms of the buying power that they have.
- [Narrator] Farmers have seen what can happen
when China stops buying U.S. agricultural goods.
When China sharply reduced orders
for products like corn and soybeans in 2018,
farms hit record levels of debt
despite the U.S. government responding with billions in aid.
If China stops buying us corn again
and moves its business to countries like Brazil,
farmers would need to find a replacement.
But having to replace a $5 billion export market
could be a major problem
for farmers who are already getting buy on thin margins.
(gentle upbeat music)