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

Fall 2013 marked by a rise in world grain production

September 16, 2013

According to the latest FAO outlook published in early September, the 2013 world grain production should reach 2.492 billion tons, a 14 million-ton (Mt) increase as compared to the July forecast. For the FAO, the new estimate thus indicates that world grain production might post a new record––a 179 billion Mt increase (+7.7 percent) over the 2012 figure. More specifically, the world wheat production might reach a historic peak in 2013 with an increase of 710 million tons, a 7.6 percent increase over last year. The outlook regarding global grain stocks at the close of the 2014 harvests have been slightly revised upward since July to reach 569 million tons. The new forecasts for these stocks are indicating levels to be 13 percent higher (65.5 million tons) than the low opening level––a record since the 2001/02 years.

The issue of the monthly report on World Agricultural Supply and Demand Estimates published by the USDA on September 12 confirms this upward trend. It shows that U.S. corn production this year might reach a record high of 13.8 billion bushels––slightly over 28 percent over the 2012 figure.

World wheat production is also projected at a record level and should mainly concern Argentina, Australia, Canada, the European Union and the large wheat producers of the Commonwealth of Independent States (FSU-12). In the U.S., the increase in corn production is turning out to be a surprise, since the recent high temperatures in the Midwest could have generated lower production levels.

These new estimates are confirming a gradual trend to concentrate production factors in some geographical zones with comparative and competitive benefits.

Yet, if these forecasts are not contradicted in the near future and in light of crops now recorded in most of the world large producing zones, we must however highlight the “volatility” they are subjected to since the start of the year, and its impact on the development of global prices. Indeed, in early 2013, no one had predicted a record world production, purely and simply because no one is able to anticipate it with a low margin of error several seasons in advance. We are dealing here with one of the major specific aspects of agricultural markets, which put them quite apart from other economic sectors.

Consequently, the sole production factors are not enough to explain agricultural market changes, since, beyond the permanent threat of climate hazards, agricultural markets have become intricate anticipatory markets, where the psychology of market participants is as important as price hyper-volatility. In addition, the short-term views have proven to be useless when global agricultural markets can be subject to sharp price turnarounds. Isn’t it a fact that Russia, by its sole announcement of a possible grain embargo, created havoc in international markets, leading to the soaring prices recorded in the summer of 2010?
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Paris, 24 June 2019