As the Russian invasion halts Ukrainian wheat exports and raises the prices of bread and pasta, the world’s harvest faces an additional challenge – extreme weather.
Droughts, floods, and heatwaves are threatening the harvest from the United States to France and India, adding to Ukraine’s shrinking production. Almost every major production region faces one threat or another. The only notable exception is Russia, which is set to have a rich harvest and could benefit from rising prices and limited supply in other countries, Bloomberg reports.
Wheat is resistant to cold, and its high geographical distribution usually means that the shortage in one place can be filled by another. But the many challenges put this resilience to the test. Analysts expect global production to decline for the first time in four seasons, according to a Bloomberg study ahead of a report by the US Department of Agriculture on Thursday. This is likely to keep the prices of many basic foodstuffs high as the problem of hunger and the cost of living escalates from Africa to Europe.
“If there was ever a year in which there had to be optimal conditions and high yields around the world, it should have been this year,” said James Bolesworth, managing director at CRM AgriCommodities. “This is not the case. This increases the risk in this highly volatile situation.”
European Union
After a favorable start to spring, warm and dry weather is a growing problem for the world’s largest wheat exporter. Half of the wheat regions lack rain at the beginning of the key development period, and temperatures in France, the largest producer, rose to summer levels unusually early. Although production prospects may still improve, much will depend on whether water shortages will decrease over the next few weeks.
“If the lack of rain persists until the end of the month, we will have to revise our yield forecasts,” said Aurelien Blary, a crop analyst at Strategie Grains.
USA
Drought in the central plains of the United States has already led some growers to write off the harvest of red winter wheat used to make bread flour. Harvest in Kansas, the largest producer, will begin next month, and the harvest will fall “well below the average for the past five years,” said Aaron Harris, vice president of research and operations at Kansas Wheat. Harvest insurance agents expect some fields to have zero to five bushels per acre instead of the usual 35-40 bushels, he said.
Shrinking supply threatens to lead to even higher grain prices, which will worsen supply chain inflation and damage US exports. “West of the Mississippi River needs rain everywhere,” Harris said. “If we don’t have these regular rains, the size of the harvest will get smaller with each passing day.” At the same time, excessive rains in the north make it difficult to plant spring wheat.
Canada
Similar double meteorological problems are observed in North America and beyond the US border. Cold temperatures have slowed sowing in Canada, and growers are now trying to sow in fields that are either too wet or too dry.
Drought is a problem in southern Alberta, where spring wheat and durum wheat are used to make pasta. According to the Alberta Ministry of Agriculture, the humidity there is lower than a year ago, and dry and windy conditions lead to soil erosion. Further east in Manitoba, a series of storms left farmers jobless. This week’s forecast is for more rains, which calls into question recent progress.
“99% of farmers have not yet gone to the fields,” said Bill Campbell, president of Keystone Agricultural Producers, noting that it could take a week for the land to dry out after the rains have stopped. “We’re back to square one.”
India
The heat has burned the wheat fields of the world’s second-largest producer, reducing expectations for exports to alleviate global shortages. In March, temperatures reached their highest level since 1901, destroying crops in a key period. This gave impetus to estimates that yields will fall by 10 to 50% this season.
The Ministry of Agriculture and Food has reduced its production forecast to 105 million tonnes from the previously forecast 111 million tonnes, and some traders believe the harvest will be even lower. Heat continues in some parts of northern India, which could lead to some crop delays if people avoid going outside.
China
China is a world leader in wheat production and has concerns about winter wheat following unusual autumn floods. Social media videos show farmers mowing wheat before it ripens, hoping to get a better price by selling it for animal feed. The fields are due to be cleared in about 20 days, and authorities are investigating whether there was any illegal destruction. China will want to limit its dependence on foreign supplies after becoming one of the largest importers in the last two seasons.
Black Sea
Soil moisture in Ukraine is satisfactory, which increases the prospects for extraction. However, the war will limit production, and there are concerns about where to store the harvest, as due to lagging exports, the silos are full of last year’s grain.
Favorable weather is also observed in Russia and an almost record harvest can be obtained. This strengthens the prospects for delivery, although transportation and insurance costs are high and some traders avoid its goods.
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