Producer Price Index: Coarse grains

In 2025, the coarse grain price index dropped 15.9 percent to 167.6, primarily due to reduced barley production and diminished international demand as US exports to markets like China declined significantly. This drop was further fueled by increased output from major exporters such as the European Union and Russia, which lessened the global need for US barley, while trade complications and rising tariffs discouraged countries like China from maintaining previous purchase levels. As a result, the United States lost trading advantages and faced greater price volatility, with alternative suppliers increasingly filling the gap in global markets.

Between 2020 and 2025, the coarse grain market experienced considerable volatility. Prices surged in 2021 and 2022, climbing from 175.8 in 2020 to 275.7 in 2021, and reaching 339.4 in 2022. This sharp increase was the result of multiple global disruptions. The COVID-19 pandemic triggered extensive supply chain disturbances, restricting the movement and distribution of grain and causing supply shortages just as economic activity and demand recovered rapidly. These constraints were exacerbated by unfavorable weather in key grain-producing regions, which further limited output and tightened market supply. In 2022, the conflict in Ukraine, a major grain-exporting region, further amplified the crisis. Disruptions to farming, logistical constraints on exports, and significant market uncertainty prompted increased speculative activity and hoarding, driving prices to all-time highs. These developments strained supply chains globally and heightened concerns regarding food security.

Market conditions began to stabilize from 2023 onwards. The index fell from 339.4 in 2022 to 262.8 in 2023, and continued its downward trend in 2024 and 2025. Recovery in production, supported by improved weather, allowed inventories to rebuild. Economies undertook structural adjustments to diversify the origin of grain imports and strengthen resilience, reducing reliance on regions subject to geopolitical volatility. Moderating demand growth, shaped by changing consumption patterns and broader economic adjustments, contributed to a more balanced market. The development and adoption of advanced farming techniques and improved risk management also helped in stabilizing supply volumes.

Over the five years through 2025, despite significant short-term spikes, the index illustrates a net decline, falling at an annualized rate of 1.0%. Macroeconomic trends such as shifting global trade relationships, increased investment in agricultural innovation, and a growing global focus on food system resilience have been integral in shaping grain prices during this period. Their influence has contributed to both volatility during times of crisis and stability during recovery phases, highlighting the ongoing significance of global interconnectedness and supply chain management for this driver.