1. 10 The Christian Science Monitor | August 30, 2010
by Stephen Kurczy / Staff Writer
Is there a grain crisis?
No. But that doesn’t mean the situ-
ation in Russia is insignificant. It was
the world’s fifth-largest wheat grower
and fourth-biggest wheat exporter in
2009, after the European Union, the
United States, and Canada. In
2009-10, Russia harvested 94
million tons of grain, includ-
ing 62 million tons of wheat –
18 millions tons of which was
exported. In 2010-11, Russia is
expected to harvest about 67
million tons of grain and to ex-
port 3 million tons of wheat, ac-
cording to the US Department
of Agriculture.
Along with drought, Moscow
hit a new high of 102 degrees
F. on July 30, according to the
National Climatic Data Center.
Temperatures continued to
hover 27 degrees F. above av-
erage during the first half of
August. The heat wave helped
spark more than 600 wildfires in
July over 494,200 acres of land.
The fires crept within 50 miles
of Moscow, pushing carbon
monoxide levels to 6.5 times the
allowable level.
What is the fallout in Russia?
By mid-August, wildfires were
contained to 56,000 acres. But the
damage was done – physically and
politically.
The fires destroyed more than
2,000 homes and killed more than 50
people; the indirect toll of the heat
and smog is estimated to have con-
tributed to the deaths of thousands
more. Analysts at HSBC Holdings
said the drought could reduce 2010
economic growth by a full percentage
point – or $15 billion.
Amid the crisis, Prime Minister
Vladimir Putin stepped out front, per-
sonally flying a firefighting plane over
the blaze. President Dmitry Medvedev
said that “what is happening now in
our central regions is evidence of this
global climate change,” a shift for a
government that has resisted action
on climate change out of fear it could
slow economic growth.
“It’s hard to tell whether or not
Russia will use this as a wake-up call,”
says Jake Schmidt, international cli-
mate policy director for the Natural
Resources Defense Council. “Policy
change doesn’t happen in one day.”
How does this affect US farmers?
The ban, and also the drought in
neighboring Black Sea region coun-
tries Ukraine and Kazakhstan, sent
wheat prices to a two-year high of
nearly $8 a bushel, from just about
$4.50 in early June. That’s bad news
for grain importers but good news for
grain exporters.
Egypt, the world’s largest wheat
importer, has said the rise could cost it
an additional $705 million. Egypt is al-
ready buying more grain from the US.
Meanwhile, grain exporters
Europe, Australia, and Turkey are
each forecast to increase wheat ex-
ports by about 1 million tons.
For the US, the world’s No. 1 ex-
porter of wheat and corn, the effect is
even greater.
The US Department of Agriculture
boosted its forecast for US wheat ex-
ports by 5.4 million tons, to 32.7 mil-
lion tons, for the year 2010-11. The
USDA projects agriculture exports to
surpass $100 billion this year, second
only to 2008, when agriculture ex-
ports topped $110 billion.
Could there be food riots?
Food riots are not expected, as
happened in 2008 when escalating
food prices led to rice export bans.
At that time, grain stocks “were very
tight,” says Gerald Bange, head of the
USDA’s World Agricultural Outlook
Board, but since then the world has
seen several good harvests.
The world produced a record-high
yield, in 2008-09, of 683.3 million tons
of wheat, followed in 2009-10 by 680.3
million tons.
The year 2009-10 ended with 194
million metric tons of wheat stock,
an increase of 28 million metric tons.
The USDA forecasts the year 2010-11
to end with 175 million metric tons
of wheat stocks, which is still much
higher than the end of 2007-08.
“What happened in Russia is man-
ageable, given we had large stocks
going into it,” says Mr. Bange. The
USDA forecasts American food infla-
tion this year at 1.5 to 2 percent, and
at 2 to 3 percent next year – compared
with 2008 food inflation of 5.5 per-
cent. “I think that the impact of the
situation on food prices will be very
small, very small,” he says.
Still, consumers around the world
may feel some effects. Rising wheat
costs, for example, led Sara Lee Corp.
on Aug. 12 to say it expected to raise
bread prices over the next year.
Gwynne Dyer, author of “Climate
Wars,” wrote in a recent column that
“in poor countries, where people
spend up to half their income on food,
the higher prices will mean that the
poorest of the poor cannot afford to
feed their children properly.”
Is climate change to blame?
Russia’s leaders blamed the
drought on global warm-
ing, though Lester Brown of
the Earth Policy Institute in
Washington, D.C., says no one
event proves or disproves cli-
mate change. But heat and
drought similar to that experi-
enced in Russia are projected
to occur more frequently as
Earth’s temperature rises, he
says.
The rule of thumb, says Mr.
Brown, is that with every de-
gree (Celsius) rise in average
temperature, we lose 10 per-
cent of food production. Over
the next century, the global
temperature is expected to rise
up to 11 degrees F. By compari-
son, the Russian drought killed
2 percent of the world’s grain
harvest.
USDA’s Gerald Bange of-
fers a less dire outlook. For
decades, he says, corn yields
have increased annually by
two bushels per acre per year.
“It continues to grow, and I’m not pre-
pared to say it will plateau in my life-
time,” he says. Other countries such
as China, he adds, have much room to
improve their crop productivity.
Both Brown and Bange agree that
what happened in Russia could hap-
pen elsewhere with more serious
consequences.
“We’re lucky that this heat wave
was centered in Moscow instead of
Chicago,” says Brown. “At most, the
Russians lost 40 million tons of grain.
If Chicago were to have average
temperatures in July of 14 degrees
[Celsius]abovethenorm,itwouldhave
cost us and the world 150 million tons
of grain.” r
Precious crop: A man shovels grain at a farm inVasyurinskoe, Russia.The country has seen 25
million acres, a quarter of its arable land, destroyed in its worst drought on record.
MiKhail Mordasov/afp/Newscom
Russia’s drought andthe food supply
major grain exporter Russia saw one-third of its crop wiped
out by the worst drought in a century. To prevent inflation and ensure
supplies for Russian tables and livestock, the government banned all
grain exports from Aug. 15 to Dec. 31. The news has sent crop prices
soaring. It’s bad news for grain importers, but increased demand
may boost profits for other grain exporters such as the US.
BRIEFING