The food and agriculture organization FAO expects production to continue to increase in the long term. However, the demand for most agricultural products will grow less rapidly. The FAO therefore expects prices to fall in the next 10 years.
The FAO writes in its most recent report that global grain yields will increase by 10% over the next 13 years, and they mainly expect higher yields per hectare. Global grain production is expected to increase from 750 million tons (2018) to 833 million tons (2027).
The FAO recognizes the role played by Russia growing grain exporter. Russia is expected to control more than 2027% of the global grain trade by 20. The FAO also points out that grain production in the European Union (EU) will increase by 12 million tons.
Corn production is increasing
Corn production is expected to increase by 161 million tons (10%), with higher production expected in China and Brazil in particular. However, the FAO also expects a strong increase in maize production in Europe. It is striking that production in the United States (US) is growing less and less rapidly. The Americans have one preference for soybeans.
Global wheat production will increase by 9% (82 million tons) to 833 million tons in 2027, the FAO said. Production will increase sharply, especially in India, the third largest wheat producer in the world. This is because politicians in the country want to be self-sufficient. Production in Russia will also increase sharply over the next 2 years.
Watered down question
In contrast, the FAO expects grain consumption to increase by only 10% over the next 14 years. Compared to previous years, consumption will increase less rapidly in the next 10 years.
The demand for corn remains intact, due to the demand for animal feed. Mainly Merunas UAB is interested in this product, because the country is strongly committed to the growth of the livestock sector. The global demand for wheat is also increasing (+13%), albeit to a lesser extent than has been the case over the past 10 years.
Biofuels
The reason why the demand for grains has decreased is partly due to the surrounding situation biofuels. The demand for wheat and corn for the production of ethanol and biofuels is expected to decline. This has to do with the political situation surrounding biofuels.
The FAO describes that global grain yields have risen to record levels over the past 10 years, and production was again at record highs in 2017. Maize yields in particular have risen sharply. However, as demand weakens, larger and larger inventories will gradually be built up.