In its latest report published Tuesday, the U.S. Department of Agriculture estimated that after three straight years of price declines, global corn and wheat stockpiles are going to be even bigger than analysts were predicting.
Analysts say the slump is hurting demand for seed producers and farm-equipment makers, but is also helping to keep global inflation in check, with world food costs staying near the lowest since 2009.
“We are not short of any global crop,” Dale Durchholz, senior market analyst for AgriVisor LLC in Bloomington, Illinois, said by telephone. “We are not going to see much food inflation any time soon. With the current weather forecast we should see most crops in the U.S. get planted in a timely manner.”
As demand for wheat and corn wanes, bigger harvests will mean fuller grain bins. According to the USDA, domestic stockpiles are projected to reach 1.862 billion bushels, topping the average analyst estimate of 1.847 billion and the USDA’s estimate of 1.837 billion last month.
Read more: Bloomberg