Despite wars, civil unrest and a second consecutive strong La Niña, world grain production of wheat, corn and rice has had another record year. Two global agencies are forecasting that in 2023/24, grain production will exceed consumption.
The US Department of Agriculture Foreign Agricultural Service (USFDA) is forecasting record or near record production in all three of the world’s main food crops for the next growing season.
Global corn production is predicted to sharply increase, driven primarily by a forecast of continued high production in Brazil and rebounds in the US and Argentina.
The global wheat outlook is for larger production and consumption. Production is projected to increase with larger crops in Argentina, Canada, China, the European Union, India, and Turkey more than offsetting large declines for Australia, Kazakhstan, Russia, and Ukraine.
Global rice production is forecast at a record high with larger production in Asia, especially on crops in Bangladesh, India, and China along with a recovery in Pakistan. Global consumption is expected to rise to a new record, primarily from strong growth in India, Bangladesh, and Sub-Saharan Africa.
The USFDA says after three consecutive record crops, the Australian wheat crop is forecast to fall 26% on anticipated lower yields. A “strong” El Niño is expected to influence Australia’s next growing season.
Ukraine crops are forecast to fall more than 20% from the prior year, reaching half the level reached in 2021/22.
The Australian Bureau of Agriculture and Resource Economics (ABARE) reported in March that below average summer rainfall in the cropping regions of Queensland and northern New South Wales limited prospects for summer crop production in 2022–23.
ABARE says: “The recent unfavourable seasonal conditions have lowered soil moisture levels, curtailed the planting of summer crops in the latter part of the planting window and adversely affected yield prospects for some dryland crops.
“Australia is anticipated to have a sharp decline in exports with production forecast down by one quarter. Given the reduction in supplies and only slightly lower domestic use, Australian exports are projected down 8.0 million tons (mt) to 24.5mt.”
Favourable production forecasts in the Northern Hemisphere, coupled with tame export demand, applied downward pressure on global prices.
In May the UN’s Food and agricultural agency (FAO), which reports food stocks on a monthly basis to plan for shortages, raised its forecast for world cereal production in 2022 by 7.7mt, 1% lower year-on-year.
FAO says an upward revision to wheat production in Kazakhstan, where official data indicated higher-than-previously-foreseen yields, pushed the global wheat outturn above 800mt for the first time on record.
The forecast for world coarse grains production has also been lifted, reflecting a larger-than-previously-expected harvest in India based on official data that reported higher yields and area, but is still 2.8% below last season’s level.
Myanmar, once called the “rice bowl of Asia”, has been devastated by civil war, and the FAO says it will end the 2022/23 season with a pronounced output reduction largely due to constraints posed by surges in input costs.
Elsewhere, official assessments in Colombia, Ghana and Peru also indicate better harvest results during the ongoing season than previously envisaged, which outweigh a small downward revision to output prospects for the Philippines.
At 2,780mt, the FAO forecast for the 2022/23 world cereal use has been raised by over a million tonnes since the previous month, but it still points to a 0.7% decline from the 2021/22 level.
Importantly, FAO’s forecast for world cereal stocks by the close of seasons in 2023 is nearly five million tonnes higher than the previous forecast in April, for a total of 855mt.
FAO says based on the latest forecasts, the 2022/23 global cereal stocks-to-use ratio would stand down slightly from 2021/22 (29.8% versus 30.8%), “but it still indicates a relatively comfortable supply level globally.”