Extreme weather and epidemics push global food prices to 46-year highs
Yves is here. Although it is convenient to blame rising food prices on pandemic stimulus, the biggest driver is crop shortages caused by climate change. The situation is worse, because the growth caused by government policy can be remedied (in fact, Joe Manchin followed the orders of using Sherman tanks to squash rats).
Food shortages caused by climate change are a bigger problem. Yes, we may get relief for a while, but the trend is not on our collective side. Some of the new patterns seem to be persistent, such as the continuous dry weather in the western United States, which of course includes key growing areas in California, while the eastern part is more humid.
By Jeff Masters.Originally published on Yale Climate Link
An aerial view of a barge stranded along the Mississippi River in Louisiana on August 30, 2021, after Category 4 Hurricane Ida. In September, the hurricane severely disrupted the transportation of grains and fertilizers, causing global food prices to remain high. (Image Source: Congressman Garrett Graves (R-La), Ranked member of the Special Committee on Climate Crisis of the House of Representatives)
The Food and Agriculture Organization of the United Nations (FAO) stated in its report that global food prices rose by 1.2% in November from October, the highest level since June 2011 (not adjusted for inflation). Monthly report December 2nd.Later Inflation adjustment, The average food price in the 11 months of 2021 is the highest level in 46 years.
Although global cereal production in 2021 is expected to set a record: 0.7% higher than the historical record set in 2020, prices remain high. However, due to increased demand (partly due to increased production of wheat and corn for raising animals), it is expected that the 2021 harvest will not be able to meet the consumption demand in 2021/2022, resulting in a slight decline in global food inventories by the end of 2022, down to 2015/2016 The lowest level since the year.
The increase in global food prices in November was mainly the result of higher prices of cereals and dairy products, with wheat prices being the main driving factor.In the interview Fortune NetCarlos Mela, head of agricultural product market research at Rabobank, attributed the main reason for the increase in wheat prices to drought and high temperatures that have hit major wheat producing countries such as the United States, Canada and Russia.
Drought and heat in the United States cause A 40% drop in spring wheat production in 2021, and Down 10% In the total wheat production (spring wheat accounts for about 25% of the total U.S. wheat production). According to Aon, the economic loss of U.S. agriculture is expected to exceed US$5 billion by 2021 (see tweet below). The greatest losses are expected in the northern plains, where the spring wheat crops have been severely hit by drought and high temperatures.Fortunately, the 2021 US corn crop estimate It will become the second largest production on record, an increase of 7% over 2020. Soybean production in 2021 is also expected to be the second largest in history, an increase of 5% over 2020.
Crop insurance expenditures related to drought and high temperatures are now as high as US$2.6B in the United States, and are rising rapidly. Lost the most? Not in the west, but in the north.
The overall economic cost is expected to exceed $5B. pic.twitter.com/xSFI5z8hVu
— Steve Bowen (@SteveBowenWx) December 1, 2021
Extreme weather is a key factor in high food prices
Food prices are complex and are affected by fluctuations in weather, biofuel policies, trade policies, food reserve policies and international financial conditions All important factor. High fuel prices, supply chain disruptions caused by the pandemic, and high fertilizer prices have all contributed to the current high global food prices.
according to ReutersSince the beginning of this year, global fertilizer prices have risen by 80%, reaching the highest level since the 2008-2009 global financial crisis. The main reasons for the current high prices include extreme weather events (especially the cold wave in Texas in February and Hurricane Ida in August), which disrupted fertilizer production in the United States, and high-cost natural gas in Europe, which is the production of fertilizers. Key components). The shortage of chemical fertilizers may reduce the 2022 grain harvest, according to CF Industries, a major fertilizer producer.
Carlos Mela of Rabobank noted that Russia, a major wheat producer, raised its wheat export tax this year to stimulate domestic supply. “This is terrible,” Mela said. “Events like the French Revolution and the Arab Spring are blamed on high food prices.” The high wheat prices in 2011 (after the 2010 drought in Russia triggered export restrictions) led to large-scale civil unrest and the collapse of multiple governments (” Arab Spring”).
The current high food prices coupled with the ongoing pandemic will make the global food supply extremely vulnerable to extreme weather in 2022. Extreme weather, mainly drought, has led to simultaneous failures in many major food export regions.
Bob Hanson contributed to this article.