Agricultural Finance: From Crops to Land, Water and Infrastructure

Chapter 7Grain Cereals: Corn, Wheat, Soybean, Rice, and Sorghum

‘But let the land be renewed and lie uncultivated during the seventh year!’

The Bible

7.1 Introduction

In this chapter are discussed corn and soybeans, which are usually referred to as ‘feed grains’ because of their primary use for animals; wheat and rice, which are referred to as ‘food grains’ since they are primarily directed to human consumption; and sorghum, a gluten-free cereal, mostly used for animals in developed countries and by humans in Africa, and is viewed by the author as having a great future because of its virtues for the human digestive system.

After the major drought in the USA in 2012 – the worst since the Dust Bowl years of the 1930s, with corn prices rocketing above $8 per bushel because of a decimated US crop – propitious growing conditions from Brazil to Ukraine to the USA in 2013 have raised hopes of a sharp rebound in world cereals stocks, reducing food security concerns. World corn, rice, soybean, and wheat production will break records in the agricultural year 2013–2014, according to the USDA estimates in August 2013. The International Grains Council in London expects grain inventories of major exporters such as Argentina, Australia, Europe, Russia, and the USA to rise by 40%. The US government forecast is a record domestic corn crop of almost 350 million tonnes, up by 28% from 2012, and the third biggest soybean crop of 88.6 million tonnes.

7.2 Corn

Corn was first cultivated in Central ...