Recent Global Crop Production Shortfalls Curt.Reynolds@fas.usda.gov USDA Foreign Agricultural Service (FAS) Office of Global Analysis (OGA) International Production Assessment Division (IPAD) Image Source: West, Paul C, et al, 2010. "Trading carbon for food: Global comparison of carbon stocks vs. crop yields on agricultural land”, Proceedings of the National Academy of Science, November 16, 2010, vol. 107, no. 46, pp.19645-19648, http://www.pnas.org/content/107/46/19645.full.pdf+html

Record soybean($17.89/bu) & corn prices ($8.49/bu). 2007 price hike from low global stocks, record droughts & US corn ethanol demand 1970’s price hike Landsat-1 launched on July 23, 1972 and first predecessor WASDE report (10/14/80) released on Sept. 17, 1973.

Low stocks raise prices Low stock levels raised prices. 0.2 is 73-days (0.2*365) of stocks

Global Corn Production ~350 MT ~65 MT ~200 MT ~90 MT >80% corn produced in northern hemisphere >80% corn produced in northern hemisphere and 100MT is exported globally 2011 Global Corn Statistics

-26% yield reduction from May’s forecast Analog year analysis (1988) and assume normal weather to end of crop season -26% yield reduction from May’s forecast Corn yield forecast from trend yield analysis by USDA/WAOB Corn yield forecast from ground sample surveys by USDA/NASS Source: USDA-WAOB (World Agriculture Outlook Board) , Monthly World Agricultural Supply and Demand Estimates (WASDE) report.

US Corn Yields -26% May 2012 trend yield forecast = 166 bushels/acre = 10.4 tons/hectare -26% September 2012 yield estimate = 123 bushels/acre = 7.7 tons/hectare

Record US Corn Production Shortfall (104 MMT) between May & September, 2012 -27% reduction in corn production forecast -72 MMT 2012 drought caused record US corn production shortfall (difference between May & September) of 104 MMT. -103.7 MMT

Global Corn Production Difference 103 MT=4.08 Billion Bushels 4 BB* $7/bushel=$28 Billion lost

US Ethanol Plant Locations & Construction Timeline Sources: Top-Left: USDA/FAS/OGA/IPAD Top-Right: USDA/NASS (right) http://www.nass.usda.gov/Charts_and_Maps/Ethanol_Plants/U._S._Ethanol_Plants/index Bottom: RFA (Renewable Fuels Association) http://www.ethanolrfa.org/pages/statistics#A

U.S. Corn Use for Ethanol and Share of Total Use Note: Projections for 2011/12 and 2012/13 are from the August 10, 2012, World Agricultural Supply and Demand Estimates (WASDE) report.

U.S. Corn Exports and Share of Total Use Note: Projections for 2011/12 and 2012/13 are from the August 10, 2012, World Agricultural Supply and Demand Estimates report.

U.S. Corn Ending Stocks and Stocks-to-Use Note: Projections for 2011/12 and 2012/13 are from the August 10, 2012, World Agricultural Supply and Demand Estimates report.

U.S. Corn Price Received by Producers Note: Projections for 2011/12 and 2012/13 are from the August 10, 2012, World Agricultural Supply and Demand Estimates (WASDE) report.

Global Exports: Soybean Trade Surpassed Wheat & Corn after 2002 Soybeans surpass wheat & corn. Soybean trade surpassed wheat and corn after 2002.

China Soybean Imports August 12, 2010 USDA/FAS/OGA China soybean imports will exceed 50 million tons and 10 years ago was only 10 million tons. The soybeans are imported from the three top producers, or US, Brazil, and Argentina. Source: USDA-WAOB, World Agricultural Supply and Demand Estimates (WASDE) and PSD Online August 12, 2010 USDA/FAS/OGA 15

Soybean Expansion in Brazil Brazil has shown the greatest increase in cropland area during the past 50 years. The expansion has penetrated the southern fringes of the Amazon forest but the largest expansion has been within the cerrado. Future expansion will also occur in the Cerrado and reduce in the Amazon due to environment pressures. Soybean expansion occurred in cerrado (i.e., savannah), with no-till farming reducing erosion from high rainfall rates and greater volumes of fertilizers (kg/ha) used to replenish leached soils. USDA/FAS/OGA/IPAD 16

Slight gain in global crop area Global production gains from increased yields Slight gain in global crop area Global production data for the three major commodities (wheat, soybean, and corn) indicate increase in area during the past 50-years is small in comparison to the increase in yields.

Greatest gains in corn yields & global corn yields continue to increase Less yield gains in wheat and soybean, and yields beginning to flat line. Global production data for the three major commodities (wheat, soybean, and corn) indicate increase in area during the past 50-years is small in comparison to the increase in yields.

US corn yields beginning to plateau near 10 tons/hectare The Green Revolution has not arrived in Africa as corn yields have only increased slightly during the past 50-years. “Green Revolution” with hybrid seeds, fertilizers, etc. has not completely arrived in Africa.

Southern Africa Agro-climates for Different Seed Varieties Pannar Seed Extravaganza in South Africa with future attendance (hopefully) from FEWSNET national reps from neighboring SADC countries.

How to Maximize Grain Production to Meet National Grain Demands?? Drought Prone Areas Provide hybrid seeds & fertilizers in high potential agro-climates with fertile soils. USAID-Zimbabwe now distribute input seed/fertilizer packages according to agro-climate zones.

Four Corn Hybrid Series in Zimbabwe Montsanto has developed multi-tiller corn where five cobs grow from several tillers. Source: Zimbabwe Seed Co. Product Manual 2010/11 USDA/FAS/OGA/IPAD

Local market (75-km north of Juba) with most products from Kampala USAID Paved & Opened Jube-Nimule Highway on Sept 12, 2012 (tarmac road from Juba to Kampala & Mombasa) Source: http://allafrica.com/stories/201209160278.html Tarmac roads in the south will pass through high potential agriculture regions in South Sudan and agriculture markets will greatly improve with tarmac roads from Juba to southern neighboring countries. Local market (75-km north of Juba) with most products from Kampala Main “highway” 10-km North of Juba

Global Production (Area & Yield) Trends: Record 2012 US corn production shortfall (~104 MMT) from opening MY forecast in May. Record maximum temperature, heat waves (>95-105oF) and droughts during Northern Hemisphere summers (July/August) will greatly reduce global crop production over major grain belts. Global stocks at record lows as demand outstrips production. Corn demand significantly increased with US corn ethanol. Crop yield improvements beginning to flat-line in countries with highest yields, indicating yield gains beginning to plateau. Crop yields in Africa can increase with better seeds, fertilizers & infrastructure. Global crop area expansion beginning to flat-line and land grab deals in Africa are increasing. USDA/FAS/OGA/IPAD

Thank you! USDA/FAS/OGA/IPAD