The difficulty of planting corn, the single largest grain crop in the world, in the northern United States adds to a string of troubled crop harvests worldwide that point to multiple years of tight supplies and high food costs.
Russia's invasion of Ukraine, a major agricultural exporter, sent prices of wheat, soy and corn to near records earlier this year. Poor weather has also reduced grain harvests in China, India, South America and parts of Europe.
Fertilizer shortages meanwhile are cutting yields of many crops around the globe.
The world has perhaps never seen this level of simultaneous agricultural disruption, according to agriculture executives, industry analysts, farmers and economists interviewed by Reuters, meaning it may take years to return to global food security.
United Nations Secretary-General Antonio Guterres said last week that the world faces an unprecedented hunger crisis, with a risk of multiple famines this year and a worse situation in 2023.
Ahead of a crucial North American harvest, grain seeding delays from Manitoba to Indiana have sparked worries about lower production. A smaller corn crop in the top-producing United States will ripple through the supply chain and leave consumers paying even more for meat than they already are, as corn is a key source of livestock feed.
Global corn supplies have been tight since the pandemic started in 2020, due to transportation problems and strong demand, and are expected to fall further. The US Agriculture Department (USDA) expects end-of-season US corn stocks to be down 33% from pre-pandemic levels in September before this year's harvest, and down 37% in September 2023.
In North Dakota, corn would normally be at least knee-high by mid-June, but only about two-thirds of the state's crop had even emerged from the ground.
The slow spring planting pace already forced USDA to lower its national corn yield outlook last month. That cut alone slashed the US harvest potential by more than nine million tons, or equals to almost half of China's record US imports last year.
The Biden administration moved to encourage planting as a means to temper food price inflation, already the highest in decades.
The government lifted restrictions on planting on environmentally sensitive land, increased funding for domestic fertilizer production and made more counties eligible for insurance for planting a second crop this year but the benefits have been minimal as conserved acreage is limited and the soil can be less productive, while farmers are hesitant to risk double-cropping when seeds and crop chemicals are priced so high.
US farmers may also leave unplanted some 3.2 million acres earmarked for corn and instead file prevented planting insurance claims that can compensate them when weather prohibits planting, according to University of Illinois economists.
Seeding by air enables farmers to produce a crop in challenging times, but the practice is costly and can lack the precision of traditional planting on dry fields, resulting in seeds that fail to germinate and lower harvest yields.
High input cost
Farmers may struggle to rebound from this season's challenges as costs for inputs, from fertilizers to fuel that runs farm machinery, remain elevated. Grain output may suffer if margin-squeezed farmers cut back.
Scott Kay, vice president of US crops for BASF SE (BASFn.DE), warned a shortage of herbicide that protects crops from weeds would likely persist.
Ukraine's grain output could take years to rebuild after fighting wrecked crop handling, storage and shipping infrastructure in a country that accounted for as much as 17% of global corn exports and 11% of wheat exports before the war.
Even once the war ends, global grain supplies are likely to remain structurally tight, said Nutrien economist Newton. Efforts to slow climate change are driving up demand for crops to produce biofuels instead of food and China is importing dramatically more grain as it runs out of new land for agriculture, he said.
Juan Luciano, CEO of grain trader Archer-Daniels-Midland Co (ADM.N), expects global crop staples to remain in low supply for at least two years.
The war will create a global wheat shortage for at least three seasons, according to Ukraine's agriculture minister.