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FAO predicts lower grain production

Early indications point to a reduction in global cereal output in 2009 from the 2008 record, according to FAO's latest Crop Prospects and Food Situation report

March 5, 2009


FAO predicts lower grain production

Early indications point to a reduction in global cereal output in 2009 from the 2008 record, according to FAO's latest Crop Prospects and Food Situation report. Smaller plantings and adverse weather look likely to bring grain production down in most of the world's major producers.

While conditions are generally favourable for winter wheat throughout Europe and the United States, planted area in these countries has declined, reflecting the prospect of sharply reduced returns compared to last year, combined with persisting high input costs, the report said. In South America, 2008 wheat production was halved by drought in Argentina, and persistent dry weather is adversely affecting prospects for the region's 2009 coarse grains.

Based on the latest estimates of cereal production in 2008 and projected utilization in 2008/09, FAO forecasts world cereal carryovers at 496 million tonnes going into the new 2009/10 seasons, the highest level since 2002.

FAO's latest forecast for the 2008/09 (July/June) marketing year points to further increases in the use of cereals for biofuels production - a total of 104 million tonnes, up 22 percent from the 2007/08 estimated level, representing 4.6 percent of world cereal production.

In the United States, total use is forecast to increase to roughly 93 million tonnes (91 million tonnes maize), up 19 percent from the 2007/08 level. Earlier forecasts expected an even faster growth in maize utilization for biofuels, but the steep decline in oil prices and the economic slowdown have lowered those expectations in recent months.
 
Crop Prospects and Food Situation report

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