Is China Running Out of Farmland
Colvin and Company provides a very good blog related to farm land investments called Farmland Forecast. In one of their more recent blogs, they did a great analysis of whether China is running out of good arable farmland.
At the beginning of 2000, China had about 128 million hectares of good arable land. As of 2010, this number is down to about 122 million hectares. China projects that they need a minimum of 120 million hectares to be self-sufficient in grain production until at least 2020. Between 1997 and 2007, China lost on average about 775 thousand hectares of land each year to development, erosion and desertification (building the giant Three Gorges Dam I am sure took many thousand acres of hectares. A city of about 3 million people alone disappeared).
China is doing all it can to preserve this farmland, however, Bank of America estimates that China is already below their minimum goal of 120 million hectares and could decrease to about 117 million hectares by 2015.
They also predict that by 2015, China will import 17.4 million tons of corn or about 638 million bushels which would equal about 5% of our current crop.
If this trend continues, crop prices should remain higher than in the past.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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