Europe and Russia are not likely to repeat their bumper wheat harvests of 2017, setting the world on track for the second year in a row of smaller wheat output, said the UN Food and Agriculture Organization. The FAO’s monthly Food Price Index rose by 1 percent during February, driven in part by adverse weather for wheat in the United States and corn in Argentina.
In its first forecast of the 2018 wheat crop, the FAO estimated a harvest of 744 million tonnes. While that total is still above average, it is nearly 2 percent smaller than in 2017 and down by slightly more than 2 percent from the record of 761 million tonnes in 2016. “Most of the projected decline stems from forecast reductions in the EU and the Russian Federation, reflecting anticipated fall in yields from the highs of 2017,” said the FAO’s Cereal Supply and Demand Brief. “The production outlook for the 2018 coarse [feed] grain crops in the Southern Hemisphere also points to a likely decrease, mostly on account of a contraction in plantings and unfavorable weather in South America and southern Africa.”
Cereal grain prices showed strong increases for the second month in a row, said the FAO in its food price report. “Grain prices were generally firmer in February, underpinned by a brisk trade activity and concerns over unfavorable weather adversely affecting the US winter wheat and Argentina’s maize growing regions.” Dairy prices also rose during February, while sugar and vegetable oil prices fell. Meat prices were steady.
The overall FAO price index rose by 13 points in 2017, ending a five-year decline in global prices.