News / USA

Food Prices Likely to Stay High

Growing demand for food, livestock feed and biofuels leaves little to rebuild tight stocks

Farmer Lu Keshuang turns the soil of his drought-affected field  located 80 kilometres north of Beijing. The drought could impact world wheat prices.
Farmer Lu Keshuang turns the soil of his drought-affected field located 80 kilometres north of Beijing. The drought could impact world wheat prices.

New data from the U.S. Department of Agriculture indicates that domestic food prices are likely to remain high in the coming months and could go higher.

With the UN food agency's price index at its highest level since records were first kept in 1990, experts are eager for information on what farmers will produce in the coming growing season. The U.S. is the world's leading producer of maize and soybeans, and the number-three wheat producer.

The U.S. Department of Agriculture's new report on prospective plantings shows farmers plan to grow maize on about 37 million hectares of land this year, 5 percent more land than last year.

"That's a lot. That's really going all-out when it comes to planting corn," says John Anderson, an economist with the American Farm Bureau Federation, adding it would be the second-largest maize acreage on record. "With that big number, though, we're not expecting to see carryover increase a whole lot because use is just very, very strong."

Carryover stocks of maize from last season are currently extremely low, according to another new USDA report. A growing demand for food, livestock feed and biofuels means there is little left over to rebuild tight stocks.

"When there's not much left in reserve, the market becomes fairly volatile," says Anderson.

That means not only will prices likely remain high, the market will be very sensitive to bad weather or any other factor that affects supplies or demand. And wet weather in parts of the U.S. maize belt already has experts concerned about planting delays. Weather is also a concern for the upcoming U.S. wheat crop. While wheat stocks are up about five percent from last year, and planted area is projected up about 8 percent, Kansas State University economist Dan O'Brien remains cautious.

"It's not what was planted for winter wheat, it's what may end up being harvested," he says. "And that could be appreciably lower and at lower yields than we've been seeing the last several years."

Bad weather already has affected the U.S. winter wheat crop and may affect spring planting as well.

The U.N. food agency raised concerns about the wheat crop in China, the world's top producer, after a serious drought this winter. Those concerns eased somewhat after precipitation fell in some major producing regions, but experts say the crop's current condition is unclear.

Soybean stocks and prospective plantings both declined in the USDA reports. That means prices are unlikely to come down in the short term. Economist Brandon Kliethermes, with IHS Global Insight, says with prices so high, farmers are likely to find more soybean acres to plant. With average weather, he says, that could bring prices down this summer.

"Now, in the event that we have an extremely wet spring or any type of early weather patterns, we could very well see these prices peak up to their 2008 levels."

Another factor that helped push prices up in 2008 was high energy prices. Mike Zuzolo with Global Commodity Analytics, notes that while they are still below their 2008 peak, crude oil prices are above $100 a barrel.

"What that does is, it sets up a 2008-like scenario now, with high food, high energy prices as we go into the spring and mid-summer," says Zuzolo.

Price spikes in 2008 touched off food riots in a number of countries around the world. High food prices have been a factor in unrest in the Middle East this year. And experts are concerned about the possibility of more unrest as food prices remain high.

You May Like

Obama: I Will Do 'Everything I Can' to Close Guantanamo

US president says prison continues 'to inspire jihadists and extremists around the world' More

Sierra Leone Educates on Safe Ebola Burials

Also, country is improving at rapid response to isolated outbreaks, but health workers need to be even faster, officials say More

Christmas Gains Popularity in Vietnam

Increasingly wealthy Vietnamese embrace holiday due to its non-religious glamor, commercial appeal More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ugandan Doctors Aid Victims of Sudan's Civil Wari
X
Adam Bailes
December 22, 2014 3:45 PM
In Sudan's state of South Kordofan, the number of amputees as result of civil war is in the thousands, but few have access to sufficient medical help. Adam Bailes recently visited the area and says a small team of Ugandan doctors has been providing remote help, producing new prosthetic limbs for those in need.
Video

Video Ugandan Doctors Aid Victims of Sudan's Civil War

In Sudan's state of South Kordofan, the number of amputees as result of civil war is in the thousands, but few have access to sufficient medical help. Adam Bailes recently visited the area and says a small team of Ugandan doctors has been providing remote help, producing new prosthetic limbs for those in need.
Video

Video Jane Monheit Christmas Special

Chanteuse Jane Monheit sings the holiday classic “Have Yourself a Merry Little Christmas,” and explains why it’s her favorite song of the season.
Video

Video Calm Amid Fear in Daily Life in S. Sudan’s Town of Bentiu

Six months ago, Bentiu was a ghost town. The capital of northern Unity State, near South Sudan’s important oil fields, had changed hands several times in fighting between government forces and rebels. Calm returned in November and since then, residents of Bentiu have been trying to regain some sense of normalcy. Bentiu’s market has reopened there are plans to start school again. But fears of new attacks hang heavy, as Benno Muchler reports from Bentiu.
Video

Video US Business Groups Press for Greater Access to Cuba

President Barack Obama's decision to do all he can to ease restrictions on U.S. trade, travel and financial activities with Cuba has drawn criticism from some conservatives and Republicans. People who bring tourists to the island and farmers who want to sell more food to Cuba, however, think they can do a lot more business with Cuba. VOA's Jim Randle reports.
Video

Video Three Cities Bid for Future Obama Presidential Library

President Barack Obama still has two years left in his term in office, but the effort to establish his post-presidential library is already underway. The bid for the Obama Presidential Library is down to four locations in three states -- New York, Hawaii, and Illinois. As VOA’s Kane Farabaugh reports, each of them played an important part in the president’s life before he reached the White House.
Video

Video Fears of More Political Gridlock in 2015

2014 proved to be a difficult year politically for President Barack Obama and a very good year for the U.S. Republican Party. Republican gains in the November midterm elections gave them control of the Senate and House of Representatives for the next two years -- setting the stage for more confrontation and gridlock in the final two years of the Obama presidency. VOA National Correspondent Jim Malone has a preview from Washington.
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.

All About America

AppleAndroid