Dive Brief:
- The U.S. supply of grains is growing its stockpiles, and this has inspired bearish outlooks from hedge funds and other analysts.
- At the beginning of March, U.S. stockpiles for corn reached a 28-year high. This surplus has contributed to decreased global food costs, which have reached their lowest since 2010.
- For two seasons in a row, corn farmers in the U.S. have produced record yields, and thus food prices have dropped more than 20% in the past year. Global soybean production also hit a record high, and wheat and sugar inventories grew as well.
Dive Insight:
Another issue for grains farmers is waning demand amid towering supplies. In March, the USDA decreased its forecast for 2015's corn use in ethanol by 1%. Due to the stronger dollar, foreign buyers are less likely to purchase U.S. grain exports as well — proven by government data that shows this year's export sales for corn and wheat are behind figures from last year.