Grain Harvest Sets Record, But Supplies Still Tight

December 12, 2007 – The 2007 grain harvest hit a record 2.3 billion tons, yet voracious global demand has pushed cereal stocks to 30-year lows. Despite growing harvests, several factors are actually decreasing the amount of grain available per person as food, which peaked at 376 kilograms in 1986:

* Industrial livestock production requires large amounts of grain, particularly corn. Grain, in conjunction with soybeans, provides the primary source of livestock feed: in total, roughly one third (35 percent) of the world’s grain becomes feed.

* Ethanol and other fuels now consume 17 percent of the world’s grain harvest. Worldwide, the amount of course grains (a group that includes corn, barley, sorghum, and other grains fed mainly to animals) converted to energy jumped 15 percent in 2007 to 255 million tons, although this is small compared with the 627 million tons devoted to livestock feed.
* In recent decades, annual growth in grain production has at best matched each year’s population growth.

The low stocks and strong demand combined to push prices of all cereals to new highs in 2007. At harvest time, the U.S. corn export price was up about 70 percent from the previous year, while the U.S. hard wheat price averaged 65 percent more than a year earlier.

Other key trends in the Vital Signs Grain Update include:

* At 784 million tons, the record 2007 corn harvest was buoyed by growing use of the grain to produce biofuels, which prompted farmers in the United States, Brazil, and Argentina to plant more land for corn. The U.S. alone is responsible for over 40 percent of the global corn harvest and half of world exports.
* The global rice harvest was up slightly to 633 million tons, while wheat also increased modestly (by 2 percent) to 605 million tons.
* Corn, wheat, and rice account for about 85 percent of the global grain harvest by weight, with sorghum, millet, barley, oats, and other less common grains rounding out the total.

Source: Worldwatch Institute