Cereal Production and Demand Up

The Food and Agriculture Organization (FAO) forecasts a record cereal production of 2195 million tons in 2007, about 4.8 percent over last year’s levels. However, supply may be inadequate to meet demand due to the growth of the biofuels industry. In its Crop Prospects and Food Situation report, FAO notes that international prices for most cereals have significantly risen and will continue to remain high.

Of the coarse grains, the bulk of the increase is expected in maize, which has an additional market in ethanol production. This increase is expected to raise total industrial use of coarse grains by 9 percent. While wheat harvest is slightly down, production is still expected to be higher by 4 percent over that of 2006. Rice production is expected to yield 422 million tons, equivalent to 2005 levels.

 Read more on the FAO report at http://www.fao.org/newsroom/en/news/2007/1000560/index.html.