Crop Insurance Today Second Quarter 2022 - 12

Commodity Market
Developments
Global grains and oilseeds production remain
in a relatively balanced position. World production
increased by three percent in 2021 while
consumption increased by only two percent.4
Despite the modest global surplus production,
reductions in total supply in 2021 linked to lower
beginning stocks were sufficient to contribute to
a fourth year of decline in world ending stocksto-use
ratio, albeit only by one percent (Figure 5).
A comparison between the United States and
the rest of world reveals somewhat different patterns
contributed to the combined draw down in
global ending stocks-to-use. In the United States,
2021 domestic oilseed ending stocks-to-use experienced
a slight increase, less than one percent, as
increased domestic use failed to completely offset
increased production, following rapid declines in
2019 and 2020. In contrast, U. S. domestic grains
total stocks-to-use also declined less than one
percent as increased production was offset by
increased domestic consumption. Worldwide, a
reduction in foreign oilseed production in 2021,
combined with an increase in total use, resulted
in a decline in foreign ending stocks-to-use of
2.7 percent from the previous year. Global grains
ending stocks-to-use fell by less than one percent
in 2021 as increased production and stable consumption
failed to offset reductions in beginning
stocks from the previous year.
Wheat
Global wheat production in 2021 represented
just over 34 percent of total grains production.
Global wheat production in 2021 increased by
less than one percent from 2020. The overall increase
in wheat production masks the variability
in individual commodity markets. In the United
States, for example, domestic wheat production
declined by almost 10 percent from 2020. In
contrast, production of wheat in the European
Union increased by more than nine percent from
the previous year. Other countries with larger
crops in 2021 included the United Kingdom,
Morocco, Argentina, and the Ukraine. Notable
declines in 2021 wheat production from the previous
year were also reported in Russia, Canada,
and Kazakhstan.
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
Crop Year
World Ending Stocks to Use %
U.S. Ending Stocks to Use % World Grains & Oilseeds Production World Grains & Oilseeds Domestic Consumption
Figure 5
e
World Grains & Oilseeds Production and Consumption;
U.S. & World Stocks/Use %
orld
35%
30%
25%
20%
15%
10%
5%
0%
Increased wheat production in 2021 was primarily
a reflection of increased harvested area
and yields. For example, in the European Union
an increase in acreage of over five percent combined
with an increase in yields of around four
percent accounted for their increased production.
Australian wheat production increased over
nine percent with increased yields of more than
eight percent on a harvested area that increased
less than one percent. At the same time India
managed to increase production less than two
percent as a 2.3 percent increase in yields offset a
decline in harvested area of less than one percent.
Of special interest, 2021 was a record year for
the Ukraine as production increased by almost
30 percent resulting from a major boost in yields,
up over 20 percent from 2020, combined with an
increase in area harvested of over eight percent.
The increase in output from the Ukraine resulted
in increased exports to markets like Egypt and
Turkey and more recently Pakistan, in competition
with Russian wheat exports in the region.
These positive steps for the Ukraine wheat industry
will likely contrast significantly from what we
see in the coming year due to problems associated
with recent events for the country and those
they supply.
4 Global oilseeds include Copra, Cottonseed, Palm Kernel, Peanut, Rapeseed, Soybeans and Sunflower seeds. Global grains
include barley, corn, millet, mixed grains, oats, rye, sorghum, and wheat. U.S. grains exclude millet and mixed grains. Wheat and
corn comprise around 87 percent of global grains, while soybeans account for almost 60 percent of global oilseeds. Accordingly,
additional detail is provided for these three crops.
12 SECONDQUARTER2022
The decline in wheat production in other
producing countries was most pronounced in
Canada and Kazakhstan. In Canada dry and hot
conditions during June and July resulted in a fall
in yields of over 33 percent, combined with a decline
in harvested area of almost eight percent
wheat production declined by over 38 percent,
down 33 percent from the five-year average. In
2021 Kazakhstan wheat production fell over 17
percent from the previous year due to similarly
bad growing conditions categorized by drought
and high temperatures. Kazakhstan yields fell by
over 21 percent as harvest area also declined by
more than five percent.
Overall global consumption of wheat is reported
as the measure of the volume of crop
used locally for animal feed and FSI consumption,
that part of the crop used for food, seed,
and industrial uses. In 2021 the volume of
wheat used for animal feed globally increased
by a little under two percent from 2020 while
FSI use increased a bit less at 1.6 percent. As
a result, global stock levels declined by around
four percent in 2021 from the previous year.
Increased feed use reflects larger supplies in
the EU and other areas along with competing
relative feed component prices, increased FSI
consumption is tied to rising populations in
many parts of the world and a rebound in economic
growth. In addition, changing diets in
areas such as South Asia and China are increas2000/2001
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Crop Insurance Today Second Quarter 2022

Table of Contents for the Digital Edition of Crop Insurance Today Second Quarter 2022