Wheat consumers are undergoing some agonizing times. Arrivals in the market are plummeting while prices are touching unprecedented highs.
Canada, the second-biggest wheat producer after the U.S., looks set to harvest its smallest crop in five years, due to an unusually dry July, while production in the European Union may be down nearly 40% from last year after flooding rains followed long droughts. Growing global demand for biofuels is also eating up grain production.
As a result of the supply squeeze, global inventories of wheat — which makes up one-fifth of the world's food intake — are expected to fall to their lowest level in 26 years, according to the U.S. Department of Agriculture.
And, if the world warms as expected over the coming decades, the terrible farming year of 2007 may be just the beginning, it is feared.
As temperatures rise, many studies predict that crop yields will decline, as the extreme droughts and floods that damaged this year's wheat crops become more common. The most fertile areas are likely to be found further north in response to the heat, opening up the possibility of agriculture in territories such as Siberia that had long been too cold for decent farming. But the same effect could turn current bread-basket regions as the American Midwest into dust bowls.
"In developed countries it means we'll pay more for wheat and other crops," says Matthew Reynolds, a wheat physiologist at the International Maize and Wheat Improvement Center (CIMMYT) in Mexico. "In developing countries, it might mean they'll go without. It's a major food security issue."