AMIS sees strong potential staple crop production in 2025, but trade, climate uncertainties remain

The FAO Food Price Index fell marginally in May but remained 6 percent higher than its May 2024 level. The decline was driven by falling cereals, sugar, and vegetable oils prices.

The Cereal Price Index fell by 1.8 percent from April and 8.2 percent from May 2024. Harvests by several South American producers and expected record harvests in the United States, coupled with strong international competition, drove down maize prices. Wheat prices fell more moderately due to slowing demand and good crop conditions in several producing regions. The Rice Price Index, alternatively, fell slightly due to firming demand and currency appreciations against the U.S. dollar.

The Vegetable Oil Price Index fell by 3.7 percent from April but remained 19.1 percent above its May 2024 level. Palm oil prices fell significantly due to seasonally increasing supplies. Soybean oil prices fell due to increased South American supplies and falling demand for biodiesel input.

The Sugar Price Index fell by 2.6 percent in April, while the Meat Price Index and Dairy Price Index rose by 1.3 and 0.8 percent, respectively.

The latest AMIS Market Monitor highlights uncertain expectations for 2025 staple food production and trade, stemming from increased global temperatures and shifting trade policies. While mid-year data suggests wheat, maize, rice, and soybean production could all increase in 2025, that outlook is far from set in stone, with April 2025 being the second warmest on record.

Wheat production forecasts increased slightly in April due to increased production in several regions, while utilization forecasts rose due to rising feed and food use. Wheat trade is expected to increase by. 3.8 percent, driven by rising imports by China and Turkey and exports from Argentina, the European Union, and Russia. Global wheat ending stocks are expected to be 2.2 below their opening levels.

Maize production for 2025 is expected to reach a record high, with increases coming from the United States, Brazil, China, the EU, South Africa, and Ukraine. Maize utilization forecasts also rose marginally, while trade is expected to be slightly below 2024-2025 levels. Global maize ending stocks are expected to be 3.8 percent above their opening levels, marking a recovery from the sharp decline seen the previous year.

Rice production is forecast to reach a record high, with abundant crops in Asia, Africa, and Latin America and the European. Utilization is also expected to increase due to rising demand for food and industrial use. Rice trade forecasts for 2025 remained steady in April, while global rice ending stocks, like production, are expected to reach a record high.

Soybean production for 2025 is also forecast to reach a record high due to rising production in South America. Utilization is also expected to increase, driven by rising demand for food and feed. Trade is forecast to rise by 2.1 percent from 2024-2025, with strong import demand coming from Asia and abundant export supplies from South America. Global soybean ending stocks are expected to reach record highs as well.

AMIS reports fertilizer markets as largely stable in May, despite U.S. trade policy continuing to contribute to overall market uncertainty. Natural gas prices in the U.S. were unchanged from March, while prices in the European Union firmed slightly. Nitrogen fertilizer prices fell from the previous month, while potash prices remained generally stable. Phosphate fertilizer prices rose slightly in April, due in part to limited export quotas from China.