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Grain Supply Update: Nov. 24
Grain Supply Update: November 24, 1996
Grain Supplies: Where Are We Now, Where Are We Headed?
(c) Geri Guidetti, 1996
May be reprinted if copyright and Sig. File remain intact.
The ’96 growing season has certainly been an interesting one for grain
growers and traders. At no other time in modern agricultural history
have global grain supplies been so low, a good harvest so important, and
the potential impact on the global food supply so great. At one point
this summer, it actually appeared that the United States faced the very
real prospect of running out of corn to feed poultry and livestock, and
to supply the corn syrup and ethanol production industries. Tight
supplies, high prices and the potential for running out of grain led to
a hurried reduction in the size of cattle herds, much higher prices for
dairy products and the temporary closing of sweetener and ethanol
production facilities.
Though the final harvest figures are not completely tallied at this
writing, they are sufficiently complete to say that it appears we have
ducked the bullet this season insofar as this year’s food supplies are
concerned. This is not to say that we have replenished our national
stockpiles to comfortable levels. We haven’t. We MUST have a good
harvest next year to prevent a critical shortages. There is no room, no
substantial cushion, for widespread crop failures. We continue to live
essentially from field to mouth. Yet, considering how close a call we
had this year, we have much to be thankful for this Thanksgiving.
If you have been watching the volatile grain markets these past few
weeks, you know that the estimates of the final sizes of the corn, wheat
and soybean crops and the projections for demand -- demand at home and
for exports to meet global needs—have risen and fallen almost daily, and
so have the prices. How reliable are the harvest and supply estimates
that come out of the Agriculture Department, the official source for
agricultural data in the United States? Where, exactly, are we right now
on the food front, and where are we headed?
When analyzed over the past 15 years, grain and other food supply
projections released by the USDA in November differ from the final
figures by small percentages. The November projections for world wheat
production, for example, have differed from the final estimate by only
1.1%. U. S. wheat production estimates were only off by 0.4%. Ending
stocks, those in the granary at the end of a growing season before the
new harvest is in, have been off 4.6% for global wheat stores, and 9.9%
for U.S. stockpiles. In a nutshell, we could say that this month’s
figures are fairly reliable and worth paying serious attention to.
Let’s take a look at some of them with respect to the past two years’
supplies.
Definitions: Coarse Grains are corn, sorghum, barley, oats, rye, millet
and mixed grains. Total Grains are wheat, coarse grains and milled
rice.
World Total Grain Supply (all in million metric tons):
1994/95—total supply 2075.48 Ending stocks: 301.21
1995/96 (est.) 2003.04 242.69
1996/97 (Nov. Proj.) 2084.00 274.54
World Wheat Supply:
1994/95—total supply 666.88 Ending stocks: 118.00
1995/96 (est.) 654.88 103.22
1996/97 (Nov. Proj.) 682.28 110.79
Coarse Grains Supply:
1994/95—total supply 991.52 Ending stocks: 133.78
1995/96 (est.) 928.33 90.72
1996/97 (Nov. Proj.) 974.32 114.29
Milled Rice Supply:
1994/95—total supply 417.08 Ending stocks: 49.43
1995/96 (est.) 419.84 48.75
1996/97 (Nov. Proj.) 427.40 49.46
**************
United States Total Grain Supply
Total Grains:
1994/95 404.44 Ending stocks: 60.17
1995/96 (est.) 339.55 25.50
1996/97 (Nov. Proj.) 365.54 46.25
Wheat:
1994/95 81.14 Ending stocks: 13.79
1995/96 (est.) 75.04 10.23
1996/97 (Nov. Proj.) 74.24 11.83
Coarse Grains:
1994/95 315.66 Ending stocks: 45.34
1995/96 (est.) 257.56 14.45
1996/97 (Nov. Proj.) 284.56 33.58
Milled Rice:
1994/95 7.64 Ending stocks: 1.04
1995/96 (est.) 6.95 0.82
1996/97 (Nov. Proj.) 6.74 0.84
These are the latest available figures in these grain categories. It is
becoming inaccurate to look at U.S. grain stocks independent of world
supplies, as the grain market, like it or not, is rapidly evolving into
one global marketplace. A great harvest in the U.S. one year is no
guarantee of a replenishment of our national stockpiles anymore, because
excess grain that drives down prices makes our grain all the more
attractive for import by foreign countries. A poor harvest or two in
the U.S. would quickly turn us into net importers of grain.
Since 1987, grain carryover stocks have trended downward. USDA data
since 1980 show that 1994/95 had the lowest carryover stocks on record.
Yet, if you look carefully at the data above, you’ll see that 1995/96
were even lower, and projections for 1996/97 do not even make it back
to 1994/95 levels. With global population increasing at a net gain of
1.7 million people/week, it is likely that carryover stocks will never
again be sufficient to protect against natural or man-made agricultural
catastrophes. Growing shortages are inevitable. Within our lifetimes,
food will increasingly become a bargaining chip in national and
international politics and a persuasive one at that...
Geri Guidetti, The Ark Institute
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