From the Ground Up - Global Demand For Grain is Growing

With a growing world population and growing economies in many countries, the demand for grain has increased.

Fortunately, the production of grain around the world has also increased.

Mark Welch is an agricultural economist with Texas A&M Agrilife Extension.

“World trade is playing such a larger role in the supply and demand, particularly of our agricultural commodities than in any time in history. With high prices we’ve seen in the grain markets the last several years, we’re seeing a dramatic increase in grain production, which is what you would expect as producers all over the world have a greater ability to respond to the same price signals that we see in the United States.”

Welch said that last year was a good one for grain production.

“In 2013 we’re seeing record high levels of feed grain production and record high levels of wheat because producers are responding to those price signals. With good crop years, with large acreages that were planted, now we’ve alleviated some of the supply concerns that we had the last several years, and prices have come down significantly because of that.”

More grain needed to be produced to meet the global demand.

“On the usage side, we’re continuing, particularly on the grain markets to see all time record highs in grain consumption, across the board, and growing at just exponential growth in grain consumption, and that includes some of the oil seeds as well. I’m including soy beans in my discussion of grains.”

When people can afford it, they want to consume protein provided by animals.

“With persons around the world having higher standards of living, wanting to improve their diets with protein, with dairy products, that’s creating an undertone of such strong demand for grain for grain consumption, and we’re seeing that around the world.”