U.S. May Have `Problem' Meeting Surging Global Demand for Wheat, UN Says

Luzi Ann Javier
Bloomberg

The U.S., the world’s largest wheat shipper, may not have the logistical capacity to meet rising global demand after rains cut the quality of the harvest in Canada and Australia, the United Nations said.

As much as 8 million metric tons of Australia’s wheat harvest may be downgraded because of excessive rains and Canada’s output suffered from wet weather, pushing importers to seek alternative suppliers, said Abdolreza Abbassian, an economist at the UN Food & Agriculture Organization, citing government estimates.

“Right now, the only country that would have such supply to compensate for the downgrade of Australia and also Canada would be the U.S.,” Abbassian said in an interview. “The problem is that the capacity in the U.S. for terminals to absorb enough milling wheat for shipment, it’s just not there.”

Increased demand from the U.S. may lead to supply bottlenecks, delaying deliveries and intensifying competition among importers, said Park Yang Jin, business manager at Seoul- based Daehan Flour Mills Co., South Korea’s largest milling wheat importer. This would help sustain a rally in Chicago futures, he said. The U.S. accounts for 27 percent of global wheat trade.

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The Future of Wheat

Denver Post

The future of wheat – in many ways the future of food – was the subject of an emergency meeting of agricultural officials who flew to Rome from around the world, concerned over skyrocketing prices. Since July, when traders saw a historic heat wave devastating Russia’s crop, prices on the world’s wheat exchanges have shot up 50 percent. Corn and other grains rose in lockstep.

Feeding the world, 9 billion people by 2050, will mean boosting food output globally by 70 percent over 40 years, the FAO says. But wheat, the biggest source of protein in poorer countries, is falling behind: As global population grows 1.5 percent a year, the growth in wheat yields – the amount of grain produced per hectare – has slipped below 1 percent a year. In the U.S., yields generally peaked in the 1990s.

In the volcanic valleys of central Mexico, on the Canadian prairie, across India’s northern plain, they sow and they reap the golden grain that has fed us since the distant dawn of farming. But along with the wheat these days comes a harvest of worry. Yields aren’t keeping up with a world growing hungrier. Crops are stunted in a world grown warmer. A devastating fungus, a wheat “rust,” is spreading out of Africa, a grave threat to the food plant that covers more of the planet’s surface than any other.

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