A surge in corn production in Brazil and Argentina will power the world to a record harvest in 2017/18, said the UN Food and Agriculture Organization in forecasting bin-busting output of cereal crops in the upcoming season. “Combined with prospects of relatively weak growth in utilization, another large output is set to keep world cereal stocks at near-record level.”
In its first estimate of cereal grains for this year, the FAO estimated a corn crop of 1.051 million tonnes, up 1.2 percent from the record set last year. A rebound in South Africa from drought in 2016 would supplement larger crops in South America. “However, a large proportion of this increase is expected to be negated by a downturn in the United Sates,” said FAO.
A USDA survey indicates U.S. farmers will reduce corn plantings by 4 percent this year. With a return to normal yields, the U.S. crop could be 14.0-14.1 billion bushels, considerably lower than the record 15.148 billion bushels harvested last year.
Overall, FAO forecast cereal production at 2.597 billion tonnes, just 9 million tonnes below the record set last year. The huge supply will mean stable prices, it said. Wheat output was forecast at 740 million tonnes, down 2.7 percent; feed (coarse) grains at a record 1.353 billion tonnes, up 0.5 percent due mostly to the record corn crop; and rice at 504 million tonnes, up 1 percent.
In addition, FAO said its Food Price Index fell by 2.8 percent in March but still was 13.4 percent higher than a year earlier. Prices for grains, dairy, vegetables and sugar fell during the month. Meat prices rose by 0.7 percent for the month and were 12 percent higher than in March 2016.