The U.S. Grains Council, which is supported by Kentucky Corn and other state corn checkoff organizations, is monitoring this development out of its offices in Washington, D.C., and Beijing, China.
"We have been getting signals that reforms were coming for some time," said USGC President and CEO Tom Sleight on Tuesday. "While we are surprised they have been accelerated, we are hopeful they will be a step in the right direction toward more market-oriented decisions related to the supply and demand for corn."
Domestic corn prices in China have declined by about 30 percent in the past six months, and the announcement caused a near-term market impact in China. However, China's corn is still priced well above the world market, and both the details of the new policy direction and its impact on feed grains markets are as of yet unclear.
"We will be seeking additional details about this announcement and monitoring its ongoing impact on markets, particularly as corn farmers in both our country and China begin planting," Sleight said.
The Council has worked in China for more than 30 years on a wide range of issues, including market development and policy work.