Policy Backgrounders

Global Food Security: Grains Update

September 13, 2024

On Thursday, Russian bombers launched cruise missiles against a civilian vessel transporting grain in the Black Sea near Romanian waters. While no one was killed in the attack on the vessel transporting grain to Egypt, this marks the first such attack on a civilian vessel in the war and a potentially dangerous escalation. Despite attacks on Ukraine’s port infrastructure, Ukraine’s grain exports are up 49 percent thus far for the 2024/2025 July-June season compared to the same period last year, according to data Ukraine released September 9. Exports from Ukraine and an expansive global wheat supply has significantly lowered the cost of wheat, with prices reaching a four-year low of $5.20 a bushel in late July. Low prices have enticed major buyers to re-enter the market and complete sizeable deals, which analysts say could soon lead to a market floor. The FAO Food Price Index stood at 120.7 points in August, marginally down from its revised figure for July of 121.0 as decreases in the price indices for sugar, meat, and cereals outweighed increases in those for vegetable oils and dairy products. This month’s value is 1.1 percent lower than its value a year ago and 24.7 percent below its historical peak of 160.3 points reached in March 2022.

• Grocery inflation is expected to continue to cool, absent unforeseen shocks. USDA expects food-at-home prices to increase 1.2 percent in 2024 and 1.1 percent in 2025, down from 5.0 percent in 2023.
• Global wheat production for marketing year (MY) 2024/2025 is projected at 798.28 million metric tons (mmt), up 1.09 percent from the previous year. The increase is largely driven by larger production in Kazakhstan and Australia that outweighs lower production in the European Union and the United States.
• US corn and soybean production is largely in line with USDA’s annual Prospective Plantings report which CED covered in its Policy Backgrounder US Spring Plantings: Food Security Update. Corn total planted area for MY 2024/2025 fell to 90.7 million acres, down 4 percent from last year. Soybean production is forecast at a record high of 4.59 billion bushels, up 10 percent from last year.