USDA Revises Corn, Soybean Crop Estimates Driving Up Prices
The U.S. Department of Agriculture (USDA)Â on Wednesday “reported that last year’s corn and soybean crop was smaller than its earlier estimates,”Â Minnesota Public Radio reports. “As a result, prices for corn, soybeans and wheat are rising quickly, sparking concern about higher food prices” (Steil, 1/13).
Corn for March deliveryÂ increased as much as 1.7 percent to $6.42Â per bushel, “the highest price for the most-active contract on the Chicago Board of Trade since July 2008,” Bloomberg/Telegraph reports.Â USDA “lowered its estimate on the country’s corn harvest last year, widening the global production deficit by 14 percent to 20.1m metric tons, from 17.2m tons in December,” the news service writes (1/13).
“The price jump comes after the U.N.’s Food and Agriculture Organisation warned last week that the world could see repetition of the 2008 food crisis if prices rose further. The trend is becoming a major concern in developing countries,” the Financial Times reports. “Agricultural traders and analysts warn that the latest revision to U.S. and global stocks means there is no further room for weather problems. The crops in Argentina and Brazil, to be harvested soon, look fragile due to dryness,” the newspaper writes.
“Stocks of corn and soyabean are at incredibly tight levels … and the markets are surging to incredibly strong prices,” said Chad Hart, an agricultural economist at Iowa State University. Dan Basse, president of the forecaster AgResource,Â said, “There’s just no room for error any more. With any kind of weather problem in the upcoming growing season we will make new all-time highs in corn and soy, and to a lesser degree wheat futures” (Meyer/Blas/Farchy, 1/12).
On Tuesday, Bruno Le Maire, France’s agriculture minister, expressed concerns about the food price spikes and called forÂ tighter regulation to prevent additional market swings, Reuters reports. France is the president of the G20. “‘This is a cause for concern and I think it is urgent to get concrete answers and efficient tools’ to avoid market swings, Le Maire told a news conference.” He said, “The fact that wheat prices rise to 140-150 euros from 110-120 euros because there is less production is just the way the market works and this is not an issue.” Â
“What we do find problematic on the other hand is that based on this reality a certain number of people come and speculate and push wheat prices to more than 200 euros ($259 per tonne). This is what we find problematic and that’s what we want to fight against,” he added. “Le Maire also said the current situation was not as worrying as in 2008,” the news service writes. “French President Nicolas Sarkozy pressed for international efforts to impose greater transparency in commodity markets trading and pricing during a meeting with his U.S. counterpart Barack Obama at the White House on Monday” (de la Hamaide, 1/12).
In related news, IRIN reports on the South African Competition Commission’s decision toÂ reject a bid by South African farmers to export a surplus of maize to food insecure neighbors Swaziland and Lesotho.
“We wanted to start a debate in the country. Surpluses of this magnitude are unusual; food prices are going up globally. We have suggested the farmers consider storing the surplus,” the Commission’s Oupa BodipeÂ said.Â “He said the surplus should challenge the government and the agriculture sector to broaden their options and suggested the farmers consider using the surplus to manufacture biofuel,” IRIN writes. The article also looks at the outlook for South Africa’s maize industry and the implications of the commission’s decision (1/13).
FAO, WFP Report Highlights Food Security In S. Sudan
The U.N. Food and Agricultural Organization (FAO) and World Food Program (WFP) on Wednesday issued a report “warn[ing] recent gains in food security in Sudan could be reversed by increasing food prices and an escalation of localized conflict. The agencies say states bordering on northern Sudan, such as Upper Nile and Unity, are most vulnerable,” VOA News reports (Schlein, 1/12).
“South Sudan produced some 695,000 tons of cereal last year, the report said” â€“ a figure Agence France-Presse/News24 writes “was nearly 30% higher than in 2009Â â€“ mainly due to favourable rainfall and increased cultivationÂ â€“ but still left a deficit of around 291,000 tons that is covered by commercial imports and food aid. â€¦ The report found that the deficit could now rise to 340,000 tons due to the high number of people returning as the region votes on independence this week” (1/12).
Meanwhile, Reuters notes thatÂ investment and security could enable south Sudan to “become a food exporter and end its chronic food dependency within a decade, the U.N. World Food Programme said on Wednesday” (1/12).
Report Outlines Two Scenarios For How Planet’s 9B People Can Be Fed By 2050
AÂ new report outlines strategies for how the world will be able to “feed the predicted 2050 population of nine billion people,” Nature News reports.Â The findings, based on data fromÂ 2006 to 2008,Â “could overturn some current assumptions about the state of global farming” (Casassus, 1/12).
The study, “called Agrimonde (Agriworld in French), is co-authored by specialists at France’s National Institute for Agricultural Research (INRA) and the International Cooperative Centre for Agronomical Research for Development (CIRAD).” It “puts forward two scenariosÂ â€“ both relatively optimisticÂ â€“ by which the planet’s expected nine billion humans are fed by 2050,” Agence France-Presse reports.
“Under a business-as-usual scenario, all regions in the world would enjoy strong economic growth, invest heavily in research, innovation, education, health and infrastructure. But, under this scenario, there is not a high priority to the environment, with resulting damage to ecosystems. Under the second scenario, environmental integrity is a key factor. To achieve this goal in sustainability, rich countries in particular would have to reduce excessive consumption that leads to obesity and tackle loss and waste in food distribution and use that today runs at around 25 percent of production,” the news service writes (Ingham, 1/12).
“Changes in food needs, living standards, climate and other factors call for new avenues of research, according to the report. The two agencies have already started work on several programmes in response to questions raised by their study. These include the Dualine project on food sustainability; European projects looking at the longevity of animal production; food-market regulation; and the use of international consortiums to develop new production strategies for rice, wheat and other cereals. Another priority is land usage modelling. The study recognizes the scale of the task, concluding that in ‘a world of rare resources, the rarest of all may be time,'” Nature News writes (1/12).Â