Global grain production is growing but outpaced by world consumption, and a number of other factors including weather, war and economic instability pose persistent risks to it, experts told delegates in November at the Global Grains Conference in Geneva, Switzerland.
For processors, the long-term challenge is to meet the growing consumer demand for a high-quality product.
Alexander Karavaitsev, senior economist at the International Grains Council (IGC), discussed the outlook for the grain market, highlighting the La Niña and El Niño weather phenomena.
"We're going from La Niña to El Niño," he said. "It doesn't necessarily mean production will be lower or higher in some parts of the world, but it could mean drier or wetter conditions."
He explained that El Niño is usually associated with wetter conditions, particularly in South America, and with dry conditions in Australia and South Africa.
Forecasting total world grain production at 2.292 billion tonnes, he said this shows how significant the increase in grain production has been over the past few years.
"Production this year will be much, much higher than the five-year average or the 10-year average or the 20-year average, especially in corn and to a lesser extent in wheat," Karavaitsev said. "But there is an inverse situation for barley, for example, as we will see a bit of a reduction."
But consumption has been rising steadily for the past six years, so there isn't enough global production to keep up, he said.
"This year we expect a further increase in consumption, and although we believe that production will recover, consumption growth is expected to outpace this recovery," Karavaitsev said.
He warned that "there are still those fears of a recession around the world, high inflationary pressures, a relatively strong dollar."
Geopolitical tensions and hostilities increase risks, while the feed market still faces threats such as bird flu or African swine fever.
"Overall, we have seen a retreat in prices from the peak we saw in May 2022 after the outbreak of the Black Sea conflict," he said. "Prices have now fallen to about a three-year low, which is around the 2020 level at the start of the COVID-19 pandemic."
For processors, the long-term challenge is to meet the growing consumer demand for a high-quality product.
Alexander Karavaitsev, senior economist at the International Grains Council (IGC), discussed the outlook for the grain market, highlighting the La Niña and El Niño weather phenomena.
"We're going from La Niña to El Niño," he said. "It doesn't necessarily mean production will be lower or higher in some parts of the world, but it could mean drier or wetter conditions."
He explained that El Niño is usually associated with wetter conditions, particularly in South America, and with dry conditions in Australia and South Africa.
Forecasting total world grain production at 2.292 billion tonnes, he said this shows how significant the increase in grain production has been over the past few years.
"Production this year will be much, much higher than the five-year average or the 10-year average or the 20-year average, especially in corn and to a lesser extent in wheat," Karavaitsev said. "But there is an inverse situation for barley, for example, as we will see a bit of a reduction."
But consumption has been rising steadily for the past six years, so there isn't enough global production to keep up, he said.
"This year we expect a further increase in consumption, and although we believe that production will recover, consumption growth is expected to outpace this recovery," Karavaitsev said.
He warned that "there are still those fears of a recession around the world, high inflationary pressures, a relatively strong dollar."
Geopolitical tensions and hostilities increase risks, while the feed market still faces threats such as bird flu or African swine fever.
"Overall, we have seen a retreat in prices from the peak we saw in May 2022 after the outbreak of the Black Sea conflict," he said. "Prices have now fallen to about a three-year low, which is around the 2020 level at the start of the COVID-19 pandemic."
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