- [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)
