World grain production down, but recovering
Rising demand for ethanol fuel, which in the United States is produced almost exclusively from corn feedstock, is having an impact on grain prices as well. "According to the CBO, about 20 percent of the increase in maize prices between 2007 and 2008 was due to domestic ethanol demand," said Weil. Demand for grains is also rising in countries such as China and India, where growing middle classes are adopting more diverse diets.
"Farming has always been an uncertain business that depends in large part on the weather, and it could be entering an even more difficult phase," said Weil. "As the global climate changes, the warmer, less stable atmospheric conditions could be detrimental for food production." In an already fragile economy, continued volatile prices and unpredictable weather-induced shortages are sure to negatively affect both producers and consumers in developing countries.
Further highlights from the research:
- Between 1960 and 2010, annual global grain production increased from 643 million tons to 2.2 billion tons.
- U.S. maize (corn) production was down 5 percent in 2010 due to drought in the east and excessive rain in the west. The United States is the world's largest exporter of maize, accounting for 56 percent of global exports from 2006 to 2010.
- According to the FAO's Cereal Price Index (CPI), which uses 2002-04 prices for wheat, rice and maize as its baseline (100), food prices increased to an index level of 185 in August 2010 and set a record at 265 in April 2011.
- Forty percent of the global increase in maize prices in 2000-07 was due to worldwide demand for ethanol, according to the International Food Policy Research Institute. Additional reasons for the jump in food prices include the weakening of the U.S. dollar, speculation on grain prices, and possible climate change impacts.
Stanford University researchers who created a model to determine how changing weather patterns affect crop yields found a 2.9 percent increase in global rice production as a result of greater precipitation, but losses of 3.8 percent for wheat and 2.5 percent for maize.