Production woes and extreme weather DifficultiesAcross the world, the indicators we follow have shown a decrease in food production. We observe regional news reports which all seem to have a similar theme, the cost of extreme weather and declining food production. In both hemispheres, the 2018 growing season has resulted in downward declines of projections. One class of crops we follow is wheat, as it is one of the main staples of our diet. Wheat production and grains as a whole is decreasing worldwide. According to the USDA’ World Agricultural Supply and Demand Estimates (WADSE), the 2017/18 to 2018/19 wheat production has decreased while use (consumption) has increased (USDA, 2018, WADSE-581-8). Hemispheres In the Southern Hemisphere, Australia has experienced the lowest production in decades due to an extensive drought (Thukral & Barrett, 2018, para.8). Malawi, and Zimbabwe experiences sub average numbers due to insufficient moisture during critical times (Demaree-Saddler, 2017, para.7). Bread baskets across the Northern Hemisphere has suffered similar conditions as their numbers has been reduced. Last year, world wheat production was a surplus due to a bumper crop in Russia while this year India produced a number crop that buoyed global production numbers (Donley, 2018, para.1). Initially, Russia's forecasted similar numbers from 2017 but those expectations were dashed in June (Devitt, 2018, paras. 3-5). Spring wheat production in the U.S. was projected to be the smaller in a hundred years (Parkin & Newman, 2018, para.2). In Canada, our production has dropped 3.3% from last year (Skerritt, 2018, para.2). AlbertaSpring planting was delayed to due to cold and wet conditions in mid to late spring. As the summer came to end the province was still in a state of moderate to extreme drought (Shooshtarian, 2018, para.2). Provincial harvest was delayed by wet and cold conditions which resulted in 70% of the harvest left in northwest fields, around 50% in central and northeast regions and 29% left in the south (Shooshtarian, Table 1, 2018, para.2). Going forward As a whole, our focus on wheat is meant for understanding and the inclusion of other grains into the discussion highlight this negative trend even more. According to the WADSE, total grains show production declining and use increasing. As a result, carryover stock is declining and this has resulted in some interesting things occurring. When grains are classified, those with a high nutritional content are designated for human consumption while low nutritional content are meant for feed for animals. The Ukraine has reduced the number of classes for wheat from six to four (Polityuk, 2018, para.1). No rationale was given but a reduction from five classes to three for human consumption is something to note. Another occurrence which we have observed is the grains that are grown are being kept within the countries which is being produced. The European Union and Russia is contemplating the restriction of exports of wheat (Norton, 2018, Wheat, para.1). The result of these occurrences impacts trade and also increases the world price for grains. If present trends continue, we expect reclassifications and export controls to become more common. This will most likely have the effect of increasing food prices. We are reminded of the Lloyds of London’s Food Shock report where extreme weather events occur in breadbasket resulting in prohibitive food price increases and unavailability. Our next report will detail this report along with commentary on the Canadian Food Price Index. References
Demaree-Sadler, H. (2018, September 21). Conflicts, climatic shock exacerbated food insecurity. World Grain. Retrieved from http://www.world-grain.com Norton, A. (2018, September 2). Russian wheat export restriction expected. Agweek. Retrieved from http://www.agweek.com/ Parkin, B. & Newman, J. (2018, January 12). U.S. Winter Wheat Planting Touches Century Low. Wall Street Journal. Retrieved from http://www.wsj.com/ Shooshtarian, A. (2018). Crop Conditions as of October 9, 2018 (Abbreviated Report). Retrieved from Alberta Agriculture and Forestry website: http://www1.agric.gov.ab.ca/$Department/deptdocs.nsf/all/sdd16741 Skerritt, J. (2018, August 31). ‘Shock’ estimates on Canadian wheat, canola crops boost prices. Business News Network Bloomberg. Retrieved from http://www.bnnbloomberg.ca/ Statistics Canada (2018). Estimated areas, yield, production, average farm price and total farm value of principal field crops, in metric and imperial units. Retrieved from https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3210035901 Thukral, N. & Barrett, J. (2018, May 1). Australian wheat farmers plant in dust bow and pray for rain. Reuters. Retrieved from http://www.reuters.com/ U.S. Department of Agriculture (2018). World Agriculture Supply and Demand Estimates. Retrieved from https://www.usda.gov/oce/commodity/wasde/latest.pdf
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