In an interview with the Financial Times published Sept. 26, 2010, U.S. Agriculture Secretary Tom Vilsack noted that recent global grain price increases do not indicate the world is looking at a repeat of the 2007-08 price hikes. Vilsack said part of the reason for the price spike was Russia’s ban on grain exports – but that global stocks are higher this year than two years ago and market prices would stabilize over time.

The grain stocks figure, at least from perspective of U.S. supplies, was backed up by U.S. Department of Agriculture’s stocks report issued Sept. 30 that showed increases compared to last year in stocks of U.S. corn, wheat and soybeans.

U.S. corn stocks of 1.71 billion bushels are up 2 percent from last year and roughly 300 million bushels more than what analysts estimated. “I believe what we’re seeing from a stocks figure supports the Secretary’s position and confirms that the United States is a reliable supplier of feed grains,� said Thomas C. Dorr, president and CEO of the U.S. Grains Council.

The increase in prices is mostly due to perception, rather than the reality of the situation, he explained. “It is clear that food security and political stability are interconnected. Any upset in the global food supply chain provokes a worldwide response that goes well beyond the commodity market price.�

At a meeting in Rome last week, Jacques Diouf, director general of the United Nation’s Food and Agriculture Organization, made a similar comment, noted that the jump in grain prices following Russia’s export ban may have been enhanced by the response of some countries and market speculation. Diouf also noted that there are adequate global supplies of grains and that this year’s global harvest may be the third highest in history.

“An important component to maintaining global market stability is keeping markets open. Restrictions only lead to distorted markets and to buyers who are left in the lurch without a reliable supplier,� Dorr said. “The United States never closes for business. We have a stable, year-round stable supply of feed grains and honor contract commitments to deliver grain and keep exports moving.�

The marketplace volatility also underscores the need for science and innovation in agriculture. It’s important to have access to all the tools available for securing stable supplies and prices in the future, said Dorr adding that agricultural biotechnology is one of our most important tools.

“With the growth of the consumer class, demand for feed grains will continue to increase. We must continue scientific innovation to guarantee food security,� said Dorr. “Biotechnology is critical to expanding yields, protecting the environment and ensuring a high-quality crop. Going forward into the future, biotechnology will be a critical tool in helping us assure the world a steady, high-quality supply while minimizing price volatility.�