A YEAR ago, a global agriculture data analysis and forecast firm , Gro Intelligence, ran a series of industry predictions for 2023, and in the last week it reviewed those and announced another set of predictions for this year, including the expectation global wheat supplies will buck a several-year trend, and rise in 2024.

In going through its 2023 list 12 months later, Gro claimed overall it did “exceedingly well” with seven out of seven major theme predictions correct.

The firm looked back at their predictions to see what they got right and where they missed the mark during a tumultuous year that saw challenges ranging from extreme drought to weather disruptions exacerbated by El Niño and countries implementing new export restrictions.

Seven 2023 predictions evaluated:

Food price inflation will moderate

What was predicted: Price increases for some core food commodities - especially in the US - will ease, at least by the second half of the year.

What was seen: Although protein prices continued to increase in 2023, other food staple prices - including grains, dairy, and fresh produce - did moderate, helping to reduce food price inflation in major economies.

In the US, the Gro Food Price Index, part of their Custom Price Index Application, was down by 17 per cent from a year earlier in May.

However, food price inflation remains a major problem in countries that depend heavily on food imports and whose currencies have dropped in value against the US dollar.

In Egypt, for example, food prices are up 130 per cent since the start of 2020, when global food prices began to rise, according to Gro’s Agricultural Price Inflation Application.

For Argentina, food prices have risen by nearly 1700 per cent over that time period, including a sharp jump after the peso was devalued in December.

Rising Chinese imports will pressure global inventories

What was predicted: China’s easing restrictions following the COVID-19 pandemic would result in an increase in import demand for grain, oilseeds, and protein, having a massive impact on global supplies.

What was seen: Chinese imports soared in 2023, and are on track to reach record levels for soybeans and for wheat, following a poor harvest of the grain.

That indeed has added pressure on global wheat supplies outside of China, which have fallen to a 15-year low as extreme temperatures and drought damaged crops around the world.

However, a record soybean crop out of Brazil saved global soy supplies from tightening significantly.

Fuel vs food competition will intensify

What was predicted: US renewable diesel production doubled over the course of 2022, with nearly half of all US soybean oil going into making biofuels. That share will continue to increase as renewable diesel production grows, escalating the competition with food uses of the oilseeds.

What was seen: Renewable diesel capacity in the US continued to expand in 2023, helping to drive up US soybean crush rates and boost soybean oil prices.

While soy oil prices are currently down sharply from this time last year, prices are still among the highest in the past decade as biofuel demand for soybean oil is forecast to set yet another record in 2024.

Supplies of some staples will begin to recover

What was predicted: Gro forecasted that global inventories of some agricultural commodities - including soybeans, corn, and vegetable oil - would improve in 2023, although wheat stocks would remain under pressure.

What was seen: Brazil’s record 2023 soybean crop came to the rescue of global soy supplies. Corn yields in the country also reached a new high, as seen in Gro’s Brazil Corn Monitor. And production of palm oil, the most popular vegetable oil, also rose.

Meanwhile, the US also had a bumper corn harvest after the crop overcame early season challenges from extreme heat, pushing US corn ending stocks to the highest level in five years. US soybean ending stocks, however, fell to lows last seen in 2015/16, driven largely by fewer acres planted.

Little relief expected for global wheat supplies

What was predicted: The world’s wheat inventories will continue a multi-year decline in 2023. However, Russia’s strong wheat production will partially offset shortfalls elsewhere, including the US and Argentina.

What was seen: Global wheat supplies outside of China are at a 15-year low. Extreme heat and drought exacerbated by El Niño drove down wheat production in Ukraine and Argentina.

In Argentina, production climbed 20 per cent from 2022, but remained well below the five-year average.

Still, wheat prices have been kept in check by abundant exports out of Russia, the world’s top wheat exporter and the cheapest origin for wheat exports.

Fertiliser expenses will take a bigger bite out of farm operating costs

What was predicted: Gro forecasted that global fertiliser prices would drop from their mid-2022 peaks, but remain elevated compared to historical levels in 2023 and beyond, bloating farmer production costs and threatening further cuts to food production in many countries.

What was seen: Bulk fertiliser prices at major origins and destinations declined in 2023 from a year earlier but remain above historical averages.

For US corn farmers, the per-acre cost of fertiliser and other input expenses represented 44 per cent of total estimated operating costs in 2023.

While that’s down from 48 per cent in 2022, it remains 4 percentage points above the average share of costs from 2015-21.

In Europe, continued high natural gas prices mean nitrogen fertiliser prices also are historically elevated, though below 2022 levels, and nitrogen production rates remain below capacity.

Worst hit were countries with devalued currencies, such as Argentina, where fertiliser import costs have soared while import volumes have shrunk.

Few bargains in protein prices

What was predicted: Retail prices for beef and pork will remain high through at least the first half of 2023 as supplies decline. With consumers looking for comparative bargains in the poultry aisle, increased demand will also help prop up chicken prices.

What was seen: Beef wholesale prices hit record highs in 2023, as the US cattle population shrank to its lowest level since 2015.

Chicken prices, after sliding early in 2023, rebounded in the second half as producers slowed production - and prices ended the year flat to slightly higher.

However, wholesale pork prices bucked the trend. Modest growth in the size of the US hog herd pushed down wholesale prices by about 15 per cent, with retail prices lately also starting to move lower.

Seven expected trends for 2024:

In looking ahead for this year, Gro forecasted a continued calming of global food price inflation, helped by factors including China’s economic slowdown, improved fertiliser affordability, and an expected easing of US interest rates — a boon to import-reliant countries.

The impact from El Niño, which took hold midway through 2023, will be felt worldwide through at least the first half of 2024 - bolstering supplies of some agricultural commodities, including corn and soybeans, but shrinking others, such as rice and Robusta coffee.

Here are the predictions for global agricultural markets in 2024:

Food price inflation will continue to ease - Gro expects the easing of food inflationary pressures that emerged in 2023 will continue in 2024, especially in the US. Still, risks remain, including continued currency weakness in emerging economies, El Niño and its impact on several key growing regions, and an expected continuation of trade protectionist measures.

El Niño will have sweeping impacts on global agriculture - Some of the most profound effects on worldwide agriculture in 2024 will come from the El Niño climate event that started in the second half of 2023 and replaced La Niña conditions, which had prevailed for the previous three years.

Global wheat supplies will rebound after multi-year declines - Supplies of wheat, the world’s most widely grown grain, look set to rebound in 2024 after four straight years in which stocks, excluding China, have declined, according to Gro’s machine learning-based forecast models.

World corn and soybean supplies will rise - Global inventories of corn and soybeans, excluding China, have declined for most of the past five years. 2024 will bring a reversal of that trend, Gro forecasted, as higher production in several countries, helped in part by El Niño, lifts corn and soybean stocks.

China’s slower economic growth will affect agriculture worldwide - An expected slowdown in China’s economic growth in 2024 will have a far-reaching impact on agricultural industries worldwide. China is the world’s largest purchaser of agricultural commodities.

Nitrogen fertiliser prices will retreat to historical levels in second half - Gro expects nitrogen fertilizer prices to decline in the second half of 2024, possibly dropping back to a trading range not seen in several years.

US protein prices will remain strong - US meat prices will move higher in 2024, impacting household budgets and business profit margins. Meat costs have been a leading driver of food price inflation for the past two years.