Introduction
On Monday, November 10th, the United States Department of Agriculture (USDA) will release its monthly report on agricultural supply and demand, known as the WASDE. Despite its technical appearance, this report has far-reaching implications: it sets international prices, guides investment decisions in agriculture, and helps anticipate food crises.
The Global Context
In a time of global uncertainty and local tension, the WASDE report serves as a compass for farmers, governments, and investors. Reliable data from the agricultural sector is not just useful—it’s vital.
The WASDE Report’s Impact
The WASDE report provides estimates on production, consumption, exports, and inventories of key products like corn, wheat, soybeans, and rice. This information allows for price movement predictions, sowing and marketing decisions, public policy design to support agriculture, and risk assessment for climate and geopolitical factors.
FAO’s Perspective
The United Nations’ Food and Agriculture Organization (FAO) has emphasized that food price volatility is closely linked to the lack of timely and reliable information. In its latest report, the FAO highlights that global agricultural production faces increasing challenges due to climate change, rising costs, and demographic pressure, making solid statistical data and investment strategies even more valuable.
Current Food Price Trends
The FAO’s most recent food price index shows a 21.1% drop in October, the second consecutive month, reaching an index of 126.4 points—below March 2022’s peak. This decline is due to abundant cereal, meat, dairy, and sugar supplies, though vegetable oil prices have risen due to shortages in key regions like the Black Sea and Indonesia.
The Mexican Agricultural Landscape
Corn Prices and Farmer Protests
In Mexico, farmers from at least 17 states have protested for guaranteed corn prices, requesting a minimum of 7,200 pesos per ton to cover production costs and ensure fair profit margins. International corn prices are insufficient to cover production expenses, including fertilizers, seeds, machinery, water and energy, labor, transportation, storage, and debts accumulated during the agricultural cycle.
The Chicago Board of Trade (CBOT) corn price closed at 3,119.57 pesos per ton (169 dl/ton, ZCZ5 Futures Corn) on Friday and has increased by 5.36% over three months. Despite the rise, international prices are still 56% below farmers’ demands, leaving producers vulnerable.
Government Response and Price Guarantees
The Mexican government offers a joint contribution of 950 pesos per ton, bringing the corn price to around 4,000 pesos per ton. However, this still falls short of farmers’ demands and leaves producers in a precarious position.
The Importance of Data-Driven Decisions
Price guarantees can be positive if based on objective data and applied transparently. Otherwise, they may distort the market and create dependency. Reports like WASDE and FAO indices are crucial in evaluating whether demanded prices are feasible, reflect real market conditions, and can be sustained without affecting competitiveness.
Food Production as a Public Good
Food production is not merely an economic activity; it’s the foundation of food security and social stability. Investing in agriculture, protecting farmers, and promoting market transparency benefits society as a whole.
However, reliable, accessible, and well-interpreted data is essential. Statistical data like price indices, regional yields, and supply-demand projections must translate into concrete actions: investment, regulation, technical support, and fair marketing.
Key Questions and Answers
- Are guaranteed prices beneficial? Yes, if based on objective data and applied transparently. Otherwise, they may distort the market and create dependency.
- What role does data play in agriculture?
Reliable, accessible, and well-interpreted data is crucial for making informed decisions in agriculture. Statistical data should translate into concrete actions like investment, regulation, technical support, and fair marketing.
