According to the USDA report on global grain markets, global wheat production is likely to drop to 585.1 million tons, which will cause global stockpiles to drop to 119.3 million tons, rather than the originally forecast 126.4 million.
The forecasted production of wheat for Australia was 19.5 million tons, but the drought has dropped that forecast to 11 million tons. Last year, Australia produced 24 million tons of wheat, 17 million tons of which was exported.
Australia is not the only country caught up in global supply concerns; the Ukraine has effectively halted wheat exports by introducing licenses and quotas. The USDA also lowered production forecasts from China, Brazil and the European Union.
"The concern now is what happens next year," said Dan Cekander, grains analyst at global broker Fimat. "If we have poor conditions for growing wheat again, supplies could get very tight and we might see some demand rationing."
Man Global Research grains analyst James Barnett said that there is also concern for the global corn market due to the drop in USDA estimates for U.S. corn production. The United States is the world's largest producer of corn, but the USDA announced crop estimates had dropped by 209 million bushels because there were 800,000 fewer acres growing corn than previously estimated.
"What we are witnessing now is the beginning of the end of the global food bubble," explained Mike Adams, a natural health author. "Dwindling freshwater resources, combined with severe weather patterns caused by global warming, are combining to devastate global food production. This will inevitably lead to mass starvation in the decades ahead.
"In the near future, our planet simply will not support the food production levels we have grown accustomed to, and the faster global warming builds momentum, the worse the food shortages will become," Adams warned.
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