Global cereal production brief

Global cereal production set to reach a record high

FAO’s latest forecast for world cereal production in 2007 continues to point to a record output, now put at 2 121 million tonnes (including rice in milled terms), up 5.3 percent from 2006. The bulk of the increase is expected in maize, reflecting bumper crops already gathered in South America and a record production expected in the United States. However, a sharp rise in wheat production and a larger rice crop would also contribute to the record output expected.

Wheat production in 2007 is forecast to rise sharply

FAO’s forecast for the world wheat harvest in 2007, as of early July, stands at some 619 million tonnes, 3.6 percent up from the previous year. In the northern hemisphere, where harvests are already underway in many parts, bigger crops are expected in Asia and North America. In Asia, India’s production is forecast to rise well above trend, a record crop is in prospect in Pakistan and, contrary to earlier expectations, the harvest in China is also turning out larger than in the previous year. In North America, a bumper crop is expected in the United States, where the harvest is well underway in southern parts, but in Canada, farmers have sharply reduced the area sown to wheat, mainly because of better price prospects for competing crops, and subsequently a much smaller production is expected later this year. In Europe, prospects have deteriorated significantly in the past several weeks in south-eastern parts of the region because of drought conditions that developed over the spring and early summer, in particular in Bulgaria, Romania and Ukraine. As a result, the region’s aggregate wheat crop is now expected to fall 1 percent below last year’s already reduced level. Elsewhere in the northern hemisphere, drought has devastated this year’s wheat crop in Morocco, so despite about-average harvests elsewhere in North Africa, the subregion’s aggregate output is sharply down from last year and the average of the past five years. In the southern hemisphere, planting of the major 2007 wheat crops is underway, or already completed, in some parts. In South America, the aggregate area planted is forecast to remain similar to the previous year’s reduced level. However, with planting still to be completed in some major producing parts of Argentina, where unfavourable dry conditions are reported, the final outcome is still uncertain. In Oceania, the outlook for the recently planted wheat crop is generally favourable. The area did not increase as much as earlier expected because of continuing dry conditions in some parts, but is, nevertheless, estimated to be well above the five-year average.

Huge rise in global coarse grain production spurred by strong demand from biofuel industry

FAO’s latest forecast for world production of coarse grains in 2007 is about 1 076 million tonnes, up 8.3 percent from last year and a record high. The bulk of the increase is expected in maize, which accounts for about 70 percent of total coarse grain production, with output set to reach a record 778 million tonnes in 2007. In the southern hemisphere, the main 2007 harvests are mostly complete. In South America, record or above-average coarse grain crops have been harvested in most countries. In particular, maize production increased sharply in the major producing countries of Argentina and Brazil, reflecting increased plantings in response to strong demand for ethanol production, and favourable growing conditions, which led to bumper yields. The secondary crop in Brazil also looks set to increase to a record level. In Southern Africa, however, the outcome of the coarse grain harvest was less favourable, and output is estimated similar to the previous year’s below-average level. In the northern hemisphere, planting of the maize crops is mostly complete. An exceptionally large area is reported in the United States, in response to strong demand for maize from the biofuel industry, while increases in Europe and Asia are also noted. However, yields in these regions will still depend much on weather conditions during the remainder of the season.

Global rice production to recover in 2007

FAO’s forecast for global rice production (milled terms) in 2007 stands at 426 million tonnes, 1 percent up from 2006 and just marginally less than the record of 2005. However, this figure remains highly tentative, as so far, only countries situated in the southern hemisphere have harvested their main 2007 crops. While the results of these completed harvests have been somewhat lower than earlier expected, the prospects for the northern hemisphere crops remain quite positive as relatively high prices are expected to boost plantings, and thus production, assuming weather patterns are normal.