Chinese Corn Threatens Prices As USDA Predicts Bumper Crop
The USDA is estimating that American farmers may plant more corn this summer than they have in years.
But with the news that China will begin selling off its huge corn stockpiles, economists say prices could suffer.
Indiana accounts for 2.6 percent of the national increase. Purdue University agricultural economist Chris Hurt says the state increase came from fields that went unplanted last summer due to floods.
But nationwide, he says any kind of growth is bad for prices right now.
The problem is China. It announced last week it'll move away from stockpiling corn and start selling its huge inventory -- more than half of all the world's corn stores, almost enough to feed China for a year.
The country had saved up corn as it grew its middle class, putting a priority on food security. Now, that growth is slowing down. But Hurt says China is still going against global price cycles:
"This is a negative for world prices of corn," he says. "We already have too much production, and now they're talking about also reducing their inventory."
The U.S. Grains Council says in a statement they were surprised by the timing of the move and will monitor its impact. But they add they hope it signals "more market-oriented decisions" from China about supply and demand for corn.