Eric Broten had planned to sow about 5,000 acres of corn this year on his North Dakota farm, but sustained spring rains limited him to just 3,500 in a state where a quarter or more of the corn planned this year could remain unsown.
The difficulty in growing corn, the world’s largest grain crop, in the northern United States is contributing to a series of difficult harvests worldwide that indicate several years of tight supplies and high food costs.
Russia’s invasion of Ukraine, a major agricultural exporter, sent wheat, soybean and corn prices to near record highs earlier this year. Bad weather has also impacted grain harvests in China, India, South America and parts of Europe. Meanwhile, fertilizer shortages are reducing the yields of many crops around the world.
According to agriculture executives, industry analysts, farmers and economists polled by Reuters, the world may have never experienced such levels of simultaneous agricultural disruption, meaning it could take years for global food security to return.
“If we’re in a tight supply-demand environment, you can usually build it back up in a single growing season. Where we are today and the restrictions on ramping up production and the (war in) Ukraine… there’s two to three years before you get out of the current environment,” said Jason Newton, chief economist at fertilizer maker Nutrien Ltd.
United Nations Secretary-General Antonio Guterres said last week that the world was facing an unprecedented hunger crisis, with the risk of multiple famines this year and a worse situation in 2023.
Ahead of a crucial North American harvest, delays in grain planting from Manitoba to Indiana have sparked concerns about lower production. A lower corn crop in the top-producing United States will feed through the supply chain, causing consumers to pay even more for meat than they already do, as corn is an important source of livestock feed.
Global corn supplies have been tight since the pandemic began in 2020 due to transportation issues and strong demand, and are expected to fall further. The U.S. Department of Agriculture (USDA) projects end-of-season U.S. corn supplies ahead of this year’s harvest in September and 37% below pre-pandemic levels in September 2023.
In North Dakota, corn was usually at least knee-high by mid-June, but only about two-thirds of the state’s crop had even grown from the ground.
It was late May before Broten could plant corn, and he traded his seed twice for shorter and less-yielding varieties before finally deciding it was too late to plant more. Ideally, he would be done planting corn by the first week of the month. He couldn’t wait any longer for the fields to dry up.
“We were pushing the limits, tilling the soil that was way too wet, just trying to bring in a crop,” Broten said, noting that wheel tracks can still be seen in his corn fields where his farm equipment was compacting the saturated dirt are.
“We’re falling well short of our production targets for the farm,” he said.
The slow seeding pace in the spring already forced the USDA to cut its national corn yield outlook by 4 bushels per acre last month. That cut alone reduced US crop potential by more than 9 million tons, nearly half of China’s record US imports last year.
The Biden administration moved to encourage planting to curb food price inflation, which is already the highest in decades. The government lifted restrictions on growing on environmentally sensitive land, increased funding for domestic fertilizer production, and made more counties eligible for insurance to plant a second crop this year. But the benefits have been minimal as the acreage conserved is limited and soil can be less productive, while farmers are reluctant to risk double crops when seed and crop protection prices are so high.
U.S. farmers could also leave about 3.2 million acres unplanted for corn and instead file prevented planting insurance claims, which can compensate them if the weather prohibits planting, according to University of Illinois economists.
An unusually large proportion of the prevented corn plantings will likely be in North Dakota, while the crops grown are at “increased risk of damage from early to normal frosts,” the economists said in a report.
The troubles extend north across the border in Canada, where heavy snowfall in April was followed by a rainstorm in May that washed out Gary Momotiuk’s fields and forced him to relocate panicked cattle in the middle of the night.
“It was just wild how high the water was,” said Momotiuk, 49, who runs a farm near Dauphin, Manitoba. “It was probably the first time we were able to catch fish right in the yard.”
By mid-June, Momotiuk had 1,200 acres left unplanted. He abandoned plans to sow profitable canola and wheat crops because they would not have time to mature, and hoped to sow barley to feed his cattle.
Manitoba, the third-largest producer of spring wheat and canola in the province of Canada, left 880,000 acres unplanted, the most in eight years, which is 9% of the province’s insured arable land, according to the Department of Agriculture.
Cassandra Lepp, who farms near Rivers, Manitoba, said her family’s custom applications business has grown crops for other farmers by air for the first time in a decade after the spring rainstorm.
Aerial seeding allows farmers to plant a crop in tough times, but the practice is costly and can fall short of the precision of traditional planting in dry fields, resulting in seeds not germinating and crop yields falling.
“It definitely looks like the weather is getting more extreme,” said Lepp. “We just have to turn very quickly.”
HIGH INPUT COSTS
Farmers may struggle to recover from this season’s challenges as the cost of inputs, from fertilizers to fuel for farm machinery, remains high. Grain production could suffer if pressured farmers make cuts.
Scott Kay, vice president of US crops at BASF SE, warned that shortages of herbicides that protect crops from weeds were likely to persist.
Rebuilding Ukraine’s grain production could take years after battling destroyed infrastructure for handling, storing and shipping crops in a country that accounted for 17% of world corn exports and 11% of wheat exports before the war.
Even after the end of the war, global grain stocks are likely to remain structurally tight, said nutria economist Newton. Efforts to slow climate change are driving demand for crops to make biofuels instead of food, and China is importing more grains dramatically as it runs out of new land for agriculture, he said.
Juan Luciano, CEO of grain trader Archer-Daniels-Midland Co, expects the global supply of staple foods to remain tight for at least two years. According to the Minister of Agriculture of Ukraine, the war will lead to a global wheat shortage for at least three seasons.
But North Dakota bread is more worried about next year.
“We’ve had the ability to buy inputs at a decent price, so those costs won’t reflect this year’s production nearly as much as next year’s,” he said. “I expect significant increases in my production costs for an acre of corn.”
https://www.independent.ie/business/farming/agri-business/agri-food/from-war-to-wild-weather-global-crop-problems-point-to-years-of-high-food-prices-41800568.html From war to wild weather, global crop troubles point to years of high food prices