A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

A record wheat production in 2009 leads to a severe price decrease fear.

20 October 2008



According to the latest monthly forecasts of the USDA a record wheat production can be expected during the 2008-09 crop. World production is likely to reach 680,2 million tons (Mt) this year, or 12% more than last year due to food and wheat price increases which led farmers to cultivate every single piece of ground, particularly for wheat, and due to particularly favourable climactic conditions.

The extent of the increase will inevitably have consequences on agricultural prices, which react to the smallest gap between quantities produced and consumed. Indeed, last year, the gap between production and consumption only represented 2% (603 Mt produced compared to 617 Mt consumed), and nevertheless prices doubled, pushing the index up from 152 to 281 between February 2007 and February 2008. This year the situation is exactly the opposite. Based on average demographic growth (+1.2%), and taking into account the evolution of eating habits and the growing affluency of emerging countries, we can estimate that consumption will increase by at least 2% and will reach 630 Mt in 2008/2009. Production will therefore be considerably higher than consumption, by around 8%. Hence a severe price decrease can be expected, of an amplitude at least similar to last year’s, most likely stronger however, given the estimated gap. And as of now, prices have started to decline...

And, the decrease could be even stronger if speculators came back to the agricultural markets attracted by potential profits induced by these sharp prices variations. A Goldman Sachs report published on October 13, which confirms the lower farm prices forecast, in particular in the light of the USDA estimates, reports that the greatest unknown factor for 2009 remains speculation. If the markets become confident again after the adoption of the bank rescue plans throughout the world, speculation could resume and again amplify price volatility.

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Paris, 26 April 2019