Drought and Ukraine War Push Global Grain Stocks to Worrying Decade Low

CHICAGO—World grain inventories are at their tightest in years despite the resumption of exports from Ukraine. Grain supply and crop forecast data show shipments are too low and yields from other major crop producers are lower than originally expected.

Severe weather in key agricultural regions from the United States to France to China is slashing grain yields, reducing stocks and increasing the risk of famine in some of the world’s poorest countries.

Importers, food manufacturers, and livestock producers said crop availability had plummeted after war-torn Ukraine resumed shipments from Black Sea ports this summer and U.S. farmers planted large numbers of crops. I hoped it would improve. However, the United States, the world’s largest corn producer, is now expected to have the lowest harvest in three years. Drought has also hit European crops and threatened the next planting season in South America.

By the end of the 2022/23 crop year, global corn buffer stocks will be down 28% from five years ago and will be enough for just 80 days of consumption, the lowest level since 2010/11. increase. Reuters by the International Grains Council, an intergovernmental organization.

That means there are fewer days in global corn stocks than in 2012, when the last global food crisis fueled riots.

Policy makers are worried.

The World Bank has allocated $30 billion to offset food shortages exacerbated by the war, and US President Joe Biden last week pledged about $3 billion in additional funding to address global food insecurity. Announced.

Half a million Somali children are facing the worst famine of this century as severe drought hits the Horn of Africa, according to the United Nations.

Thousands of miles away in the United States, South Dakota corn grower Mark Gross said he had just 20 per acre in some fields this fall after drought and raging winds ravaged him. We anticipate harvesting only bushels. land.

The spring weather remains too dry, Gross said, after two Derecho storms brought devastating 100 miles per hour (160 kph) wind gusts to the fields of Hutchinson County and the southeastern part of the state.

“It’s going to be like 2012,” says Gross. “Nobody wants to admit it, but it’s true.”

The International Grains Council said Thursday that global stocks of all harvested grains will reach an eight-year low by the end of the crop.

Especially if the current dry weather in South America persists into the main planting season, the shift of the crop cycle to the Southern Hemisphere could lead to more severe weather and further reductions in global stocks.

Harvest forecasts for Argentina, the world’s third-largest corn exporter, have already been curtailed by dry weather.

Tractor near cracked dry soil
A farmer drives a tractor near dry, cracked ground in the Marais Breton in Villeneuve-en-Letz on August 8, 2022, as a historic drought hits France. (Stephane Mahe/Reuters)

very little water

In the Mayenne region of northwestern France, farmer Dominique Defay, the European Union’s largest grain producer, expects some corn to have few ears and yields 35% less than average. said there is.

He wanted at least 135 bushels per acre. He may only get about 90 bushels after France suffers the worst drought on record since 1958.

“These are crops with very little water,” said Defay.

Across France, July rainfall averaged less than 1 cm. The river’s tributaries have dried up as successive heat waves and wildfires ravage the countryside.

EU production is expected to hit a 15-year low, and the decline will push Ukrainian imports to 10.4 million tonnes in 2022/23, up about 30% year-on-year, according to a consulting firm. Strategie Grains says.

For a place like the drought-stricken Horn of Africa, that doesn’t mean there will be a greater demand for imports from Europe.

Ukrainian corn and wheat exports have increased since a UN-brokered deal with Russia to reopen shipments from ports that had been blocked since the start of the war. I don’t know yet how much I can export.

“It’s kind of a false hope that Ukraine is trying to close the current supply and demand gap,” said Gary Blumenthal, director of Washington-based agricultural consultancy World Perspectives. Stated.

According to official estimates, Ukraine is expected to harvest 25-27 million tonnes of maize in 2022, up from 42.1 million tonnes in 2021 following Russian aggression.

War-related sanctions mean Russia is also struggling to export what is expected to be a record large wheat harvest.

Shipments of wheat and other agricultural products from Ukraine are at a fraction of pre-war levels, said Kevin Hack, global vice president of raw materials supplier Univer Solutions.

“Supplies from that area could be cut off soon,” he said.

Epoch Times photo
A farmer harvests corn on October 11, 2021 in Princeton, Indiana. (Scott Olson/Getty Images)

South American hope

Meanwhile, Chinese farmers grapple with drought, threatening their crops, and India restricts rice exports due to bad weather.

Agri-financer Rabobank said the next U.S. wheat harvest was also in jeopardy and would be planted to dust this fall if no rains fell. It’s a recipe for a solid foundation,” he said.

The ratio, which considers U.S. wheat stocks compared to usage and reflects stockpiling levels, is expected to be the lowest in nine years in 2022/23, according to Reuters calculations of government data. The same ratio is projected to reach his nine-year low for soybeans in the United States.

Dan Basse, president of consultancy AgResource, said:

Importers are setting their sights on South America, where Brazilian farmers are expected to produce record corn and soybean crops in 2023, according to analysts and the government. We are hoping for better weather for the ongoing soybean plantings after parts were ruined by drought.

In Argentina, however, 2022/2023 corn-newly planted acreage will drop 7% from last season to 8 million hectares (20 million acres) due to a familiar problem of drought, according to Rosario Grains Exchange. is predicting

The Argentine government has also capped exports of crops to be planted in the coming weeks to an initial 10 million tons, compared to 36 million tons for the 2021/22 maize season.

“If this were a race, the farmers would be starting from the bottom with engine trouble,” Christian Russo, the exchange’s chief agronomist, told Reuters. “The situation is very complicated, the most complicated season of the century.”

Tom Polansek