Locust Outbreaks — Uncertain Implications For Grain Market – DTN

Desert locust (Schistocerca gregaria) eating green grass.

Locusts — a particular species called “desert locusts” — are swarming in mid-2020 and are forecast to destroy crops from India to Nigeria, depending on how the wind and weather develops over the next month.

This week, a second generation of these swarming insects has been reported in various East Africa locations. The Food and Agricultural Organization of the United Nations, which coordinates a global response plan against desert locusts, now forecasts that the worst of the swarms will form during the last half of June.

Today’s locust swarms have been unprecedented through the past 25 years, or in some regions, longer ago than that: 1986-1989, or 1967-1969, or as far back as 1944.

They don’t happen in any predictable cycle, like the cicadas found here in North America, but instead respond to environmental conditions. After years of drought, plentiful rain fell in 2019 across East Africa and the Middle East.

The desert locust is usually a harmless and solitary grasshopper-looking creature. But if it notices abundant greenery after such rain, the insect change its appearance from brown to pink and yellow and also changes into a gregarious and swarming pest.

They’re each about the size of a human finger and can eat their own weight in vegetative matter every day. In a square mile, 155 million locusts can cover the earth and all its contents, and a swarm can stretch across almost 200 square miles at a time.

Will This Matter In The Grain Trade?

Once the swarm has eaten everything in that 200-square-mile patch, it moves onward, flying with the wind and sometimes traveling almost 100 miles per day. Take that problem, and multiply it 20-fold every three months as the locusts’ reproduction cycle goes from adults to hoppers to more adults again.

The U.S. doesn’t have huge grain trading balances with any of the countries forecast to be affected this summer, with the exception of Nigeria, our good wheat customer). So, when we hear about these locusts, our first instinct might be to merely say, “Gee, that’s too bad,” or “Where should I send a charitable contribution?”

We might not immediately incorporate this factor into our outlooks for global grain supply and demand in the upcoming marketing year. In all honesty, the potential damage forecasts are still too uncertain, and most of the worst-affected regions are too small of exporters (and too poor of importers), for this to be a seriously bullish influence on global grain prices yet.

But the locust damage shouldn’t be ignored by the grain markets. I added up the “grain” production (corn, wheat, barley, millet, oats, rice, rye, sorghum and mixed grain) from every country where the locust situation is labeled from “dangerous” to “caution” on the FAO’s June-July desert locust forecast (in order of grain production size: India, Pakistan, Nigeria, Iran, Ethiopia, Mali, Iraq, Sudan, Niger, Burkina Faso, Kenya, Uganda, Chad, Senegal, South Sudan, Saudi Arabia, Yemen, Eritrea, Mauritania, and Somalia).

Together, this wide swath of the world annually produces 426 million metric tons of grain, which is more than the United States (417 mmt), and it accounts for 16% of global grain production and 17% of global grain consumption. In other words — not a throwaway.

Of course, it won’t be 100% of all of these countries’ production that will be lost. These locust swarms will function a bit like hail in the Midwest — totally destroying entire fields for miles at a time, but leaving neighboring regions undisturbed.

Uncertain Implications

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In India, locust swarms were noted through the month of May only in the northwest portions of the country, and the wind is likely to carry future swarms across the Arabian Sea to other countries rather than eastward to the rest of that huge country.

It’s hard not to get pessimistic and assume that the world will fail to stop this problem. Technically, the 2020 locust population is still considered an “upsurge” and not yet a “plague,” which is the term for the worst level of locust infestation. To qualify as a plague, desert locusts must cover 20% of the Earth’s land surface and threaten the agriculture of 10% of the world’s population.

From January through early June, nearly half a million acres have been treated with pesticides, but that’s not nearly enough when there are perhaps 7.4 billion acres where the locusts could be — most of them remote, difficult to access, and with extremely limited resources, including trained agronomists, pesticide applicators, and of course: money.

Therefore, there will be implications to the global grain supply. Wheat harvest is currently underway in India and Pakistan, which has declared a national emergency because of the locust damages to their crop.

From a food security standpoint, it’s even more alarming to consider the grass and forage that is being destroyed by locusts — food sources for the livestock that rural families crucially need to survive.

Elaine Kub is the author of “Mastering the Grain Markets: How Profits Are Really Made” and can be reached at masteringthegrainmarkets@gmail.com or on Twitter @elainekub.

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