Review & Outlook of Grain Production Cost in 2012 ~ 2013

By CnAgri2013-01-18 11:09:11 Print China’s planted grain acreage was 111.267 million hectares in 2012. The nation’s grain output value and the returns from grain production were estimated to be RMB1.893 trillion and RMB431 billion respectively in 2012, up 9.54% and 3.63% respectively over the previous year. Commodity grain sales volume and value were estimated to be 480 billion kilograms and RMB1.174 trillion, up 7.14% and 15.22% respectively over the previous year.
 
The cost of grain production was estimated to be RMB1.462 trillion in 2012, including RMB232.8 billion fertilizer and RMB91.5 billion seeds, up 11.41%, 9.41% and 18.74% respectively on the year-on-year basis. Farm material consumption consisted of 37.7 billion kilograms of fertilizer, 11.2 billion kilograms of seeds, 311 million MT plastic film, etc.
 
Grain yield averaged 5,299kg/hectare in 2012, a growth of 2.57% on the year-on-year basis. Grain price moved up 6% in the second half of 2012.
 
According to the State Development Commission, the cost of fertilizer, fuel and seeds was RMB2,092/hectare, RMB2,088/hectare and RMB822/hectare respectively in 2012, up 8.72%, 5.03% and 17.7% respectively on the year-on-year basis. This, plus labor cost and land expense, led to a total grain production cost of RMB13,139/hectare, up 10.72% on the year-on-year basis.
 
Grain production generated a net profit of RMB3,874/hectare, suggesting a profit ratio of 29.48%, up 2.98% but down 2.22% respectively on the year-on-year basis.
 
Planted grain acreage is predicted to be 111.198 million hectares in 2013. Grain output value and the profit of grain production are predicted to be RMB2.086 trillion and RMB539.9 billion respectively, up 10.24% and 25.28% respectively on the year-on-year basis. Commodity grain sales volume and value are predicted to be 539.9 billion kilograms and RMB1.371 trillion, up 16.76% and 9.54% respectively on the year-on-year basis.
 
The cost of grain production is predicted to be RMB1.546 trillion in 2013, including RMB232 billion fertilizer and RMB102.4 billion seeds, up 5.81%, 0.35% and 11.93% respectively on the year-on-year basis. Farm material consumption may consist of 38.4 billion kilograms of fertilizer, 11.1 billion kilograms of seeds, 317 million kilograms of plastic film, etc.
 
The cost of fertilizer, fuel and seeds are predicted to be RMB2,086/hectare, RMB2,154/hectare and RMB922/hectare respectively in 2013, down 0.29%, up 3.14% and up 12% respectively on the year-on-year basis. Taking into account of labor cost and land cost, the total cost of grain production may be RMB13,911/hectare this year, up 5.88% on the year-on-year basis. The moderate growth of grain production cost is conducive to grain production.
 
To encourage grain production, the government has raised protective wheat procurement price to RMB2,240/MT (Grade Three) this year, up 9.8% over last year, the biggest raise in five years. Grain price is predicted to rise 10% this year over last year. The net profit of grain production is predicted to be RMB13,911/hectare, suggesting a profit ratio of 34.9%, up 25.35% and 5.42% respectively on the year-on-year basis.

From “China Grains Market Weekly Report”