The US is still the world's top grain exporter, but Russia is closing the gap, with India, France, Argentina and Canada following. US farmers have been hurt by stiff tariffs from countries retaliating for new duties imposed by Washington. But the US is poised to benefit from climate change, which is pushing grain fields farther north while damaging crops in Asia, Africa and Latin America.
The trends are forcing traders, shipping companies and investors to book new ports and routes as they adjust to changing sources of supply of wheat, corn, sorghum, and barley.
Russia is becoming especially dominant in wheat, which is used to make bread and pasta. For the first time since the tsars, Moscow is poised to become the world's cereal superpower. "Our new oil," a Russian minister quipped recently.
That's a recent development. At the start of the 20th century, Russia was the world's top grain exporter. The sector was crippled by Soviet collective agriculture, which by the 1970s had to import grain crops from the US.
Now that's changing. Russian farmers are buying new tractors, investing in high-tech fertilizers and consolidating land into massive farms. Production has increased over twenty percent in the last five years. Exports are skyrocketing.
Thanks also in part to the declining ruble, Russia is grabbing market share from the US, especially in emerging markets like Egypt, Turkey and Vietnam.
A big part of how modern grain markets are evolving is determined by weather. Canada has been expanding corn production as climate change warms up its northern areas. This year, France has increased production and exports thanks to moderate weather this year, while heat waves hit other European nations.
The US, with its hyper-efficient agriculture and machinery, and generous farm subsidies, is still the world's dominant grain exporter. However, it's been hurt this year by tariffs imposed by China in retaliation for Trump administration tariffs.
Wheat farmers have been hurt the most. Challenged by higher supplies and lower prices in Russia and other competitors, they've replaced those fields with more lucrative and sellable crops like cotton, soybeans and corn.
A report published in September by the UN's Food and Agriculture Organization said climate change will reshape agricultural production and trade in the next 30 years. "Higher average temperatures, changes in precipitation, rising sea levels, an increase in the frequency and intensity of extreme weather events, as well as the possibility of an increase in damage from pests and disease" will curb crop output, the report said.
International trade, the report says, will contribute to feeding people in places where rising temperatures are making it more difficult to grow key crops like corn and wheat. Places like the US, Canada and Russia with temperatures that are currently colder will benefit, while coastal and hot countries in Asia, Africa and Latin America are the most vulnerable to climate change, the report said. Yields in West Africa could fall around 3% by 2050 in West Africa, and those in India by around 2.5%. In Canada, production could increase by 2.5%, and net exports by over 20%.