Recent Global Crop Production Shortfalls

Curt.Reynolds@fas.usda.govUSDA Foreign Agricultural Service (FAS)

Office of Global Analysis (OGA)International Production Assessment Division (IPAD)

Image Source: West, Paul C, et al, 2010. "Trading carbon for food: Global comparison of carbon stocks vs. crop yields on agricultural land”, Proceedings of the National Academy of Science, November 16, 2010, vol. 107, no. 46, pp.19645-19648, http://www.pnas.org/content/107/46/19645.full.pdf+html

Record soybean($17.89/bu) & corn prices ($8.49/bu).

Landsat-1 launched on July 23, 1972 and first predecessor WASDE report (10/14/80) released on Sept. 17, 1973.

2007 price hike from low global stocks, record droughts & US corn ethanol demand

1970’s price hike

Low stocks raise prices

Low stock levels raised prices.

0.2 is 73-days (0.2*365) of stocks

Global Corn Production~350 MT

~90 MT

~65 MT

~200 MT

>80% corn produced in northern hemisphere

2011 Global Corn Statistics

Corn yield forecast from ground sample surveys by USDA/NASS

Corn yield forecast from trend yield analysis by USDA/WAOB

Source: USDA-WAOB (World Agriculture Outlook Board) , Monthly World Agricultural Supply and Demand Estimates (WASDE) report.

Analog year analysis (1988) and assume normal weather to end of crop season

-26% yield reduction from May’s forecast

US Corn YieldsMay 2012 trend yield forecast = 166 bushels/acre= 10.4 tons/hectare

September 2012 yield estimate

= 123 bushels/acre= 7.7 tons/hectare

-26%

Record US Corn Production Shortfall (104 MMT)between May & September, 2012

2012 drought caused record US corn production shortfall (difference between May & September) of 104 MMT.

-27%reductionin corn production forecast

-103.7 MMT

-72 MMT

Global Corn Production Difference

103 MT=4.08 Billion Bushels4 BB* $7/bushel=$28 Billion lost

US Ethanol Plant Locations & Construction Timeline

Sources: Top-Left: USDA/FAS/OGA/IPAD Top-Right: USDA/NASS (right) http://www.nass.usda.gov/Charts_and_Maps/Ethanol_Plants/U._S._Ethanol_Plants/indexBottom: RFA (Renewable Fuels Association) http://www.ethanolrfa.org/pages/statistics#A

U.S. Corn Use for Ethanol and Share of Total Use

Note: Projections for 2011/12 and 2012/13 are from the August 10, 2012, Note: Projections for 2011/12 and 2012/13 are from the August 10, 2012, World Agricultural Supply and Demand Estimates (WASDE)World Agricultural Supply and Demand Estimates (WASDE) report. report.

U.S. Corn Exports and Share of Total Use

Note: Projections for 2011/12 and 2012/13 are from the August 10, 2012, Note: Projections for 2011/12 and 2012/13 are from the August 10, 2012, World Agricultural Supply and Demand EstimatesWorld Agricultural Supply and Demand Estimates report. report.

U.S. Corn Ending Stocks and Stocks-to-Use

Note: Projections for 2011/12 and 2012/13 are from the August 10, 2012, Note: Projections for 2011/12 and 2012/13 are from the August 10, 2012, World Agricultural Supply and Demand EstimatesWorld Agricultural Supply and Demand Estimates report. report.

U.S. Corn Price Received by Producers

Note: Projections for 2011/12 and 2012/13 are from the August 10, 2012, Note: Projections for 2011/12 and 2012/13 are from the August 10, 2012, World Agricultural Supply and Demand EstimatesWorld Agricultural Supply and Demand Estimates (WASDE) report. (WASDE) report.

Global Exports: Soybean Trade Surpassed Wheat & Corn after 2002

Soybeans surpass wheat & corn.

USDA/FAS/OGA

Source: USDA-WAOB, World Agricultural Supply and Demand Estimates (WASDE) and PSD Online

August 12, 2010

China Soybean Imports

Global production gains from increased yields

Slight gain in global crop area

Greatest gains in corn yields & global corn yields continue to increase

Less yield gains in wheat and soybean, and yields beginning to flat line.

“Green Revolution” with hybrid seeds, fertilizers, etc. has not completely arrived in Africa.

US corn yields beginning to plateau near 10 tons/hectare

Southern Africa Agro-climates for Different Seed Varieties

Pannar Seed Extravaganza in South Africa with future attendance (hopefully) from FEWSNET national reps from neighboring SADC countries.

How to Maximize Grain Production to Meet National Grain Demands??

Drought Prone AreasDrought Prone AreasProvide hybrid seeds & fertilizers in high potential agro-climates with fertile soils.

USAID-Zimbabwe now distribute input seed/fertilizer packages

according to agro-climate zones.

USDA/FAS/OGA/IPAD

Four Corn Hybrid Series in Zimbabwe

Source: Zimbabwe Seed Co. Product Manual 2010/11Source: Zimbabwe Seed Co. Product Manual 2010/11

USAID Paved & Opened Jube-Nimule Highway on Sept 12, 2012 (tarmac road from Juba to Kampala & Mombasa)

Tarmac roads in the south will pass through high potential agriculture regions in South Sudan and agriculture markets will greatly improve with tarmac roads from Juba to southern neighboring countries.

Source: http://allafrica.com/stories/201209160278.html

Main “highway” 10-km North of Juba

Local market (75-km north of Juba) with most products from Kampala

USDA/FAS/OGA/IPAD

Global Production (Area & Yield) Trends:• Record 2012 US corn production shortfall (~104 MMT) from

opening MY forecast in May.• Record maximum temperature, heat waves (>95-105oF) and droughts

during Northern Hemisphere summers (July/August) will greatly reduce global crop production over major grain belts.

• Global stocks at record lows as demand outstrips production.• Corn demand significantly increased with US corn ethanol.

• Crop yield improvements beginning to flat-line in countries with highest yields, indicating yield gains beginning to plateau.• Crop yields in Africa can increase with better seeds, fertilizers &

infrastructure.

• Global crop area expansion beginning to flat-line and land grab deals in Africa are increasing.

USDA/FAS/OGA/IPAD