In today’s Exponential Investor:

  • Climate-change impact food production
  • First world relies on developed world for food
  • The West will suffer the most as food standards decline

More rain in the wrong places, less snow where there used to be.

Late monsoons mean rice paddy fields remain dry until the rains come.

Mega fires used to occur every 10-15 years in Europe, but now farmers can expect them every three.

Extreme drought in normally damp land puts livestock under stress.

The warmer winters means crop pests don’t die off when they used to. During the cooler months they continue to breed, so even more come back the following year.

Once-in-a-century droughts in the UK now are expected every 30 years. 

Our entire global food supply chain has been built on weather patterns that were in place for thousands of years.

And now climate change is affecting our agriculture sector and will upend what we eat and how much we pay for it…

Climate change is disrupting agriculture

For decades, steady global food production has acted as a buffer to global supplies.

It wasn’t a huge problem when the harvests in the United States, Brazil, Ukraine, or China produced less grain than usual because additional grain could generally be sourced from another part of the world.

But climate change is shifting weather patterns. As our breadbaskets are affected, we are witnessing in real time the impact on crop yields.

This isn’t about food insecurity, rather the start of the realities of synchronised extreme weather events that affect our global food chains.

And we have very little in place to remedy this.

Only 38% of all land mass is used for agriculture. Of this, one third is for crops and the remaining two thirds serve as paddocks for livestock.

Looked at another way, 12% of all surface land mass feeds the entire world.

Importantly, only 21% of this crop land is equipped with irrigation. Meaning that close to 80% of the world’s grain is reliant on mother nature for sustenance.

Global grain-growing regions

Source: Australian Government Department of Agriculture, Fisheries and Forestry

Granted, changing climate patterns could mean that new land mass may be fertile ground in the future. But it will take decades for this ground and the associated weather patterns to form.

Our food supply is under immediate threat from changing weather conditions. 

Heatwaves and drought, for example, often precede the late arrival of monsoon seasons.

So grains get hit first, and rice second.

This year has seen several events converge on one another, with the result that next year’s food supply will be interrupted.

Below-average rainfall in Argentina and Brazil this year is expected to reduce winter crops of wheat, corn and soybeans for the 2022-23 harvest. 

This year, 40% of India’s rice paddy fields that rely on rainfall for irrigation are dry due to the late monsoon season. The delayed season means a delayed crop to market… but, more importantly, it delays planting for next year as well.

Already India has banned “broken rice” exports (the country considers broken rice grains to be  inferior to non-broken rice). India accounts for 40% of global rice exports, and this move will impact the Philippines and Indonesia most.

China has seen below-average rainfall this year for the first time in nine years and its most intense heatwave in 60 years, which will likely impact almost all rice, wheat and cotton harvests for the county.

While China is a net importer of rice and wheat, the decline in its output comes at a time when key global production is falling. This tells us that prices for wheat and rice are likely to move higher next year as there is less available.

Adapting will take decades

Another compounding factor is the increase in pests and disease.

If winters are warmer and summers are hotter, pests don’t die off in the cooler months, so their numbers increase the following year.

Pests have a much shorter life cycle than plants, and studies have suggested that they are more adaptable to climate change. Their increasing quantities means they are destroying more crops, likely resulting in greater chemical invention to protect crops for human consumption.

Don’t get me wrong, it’s highly unlikely that people in the UK will go hungry. But they will find themselves paying more for food.

So, we have rainfall on crops that need dry conditions and insufficient rain in countries that need wet conditions. And less snow in formerly snowy places means less run-off and reduces soil moisture.

We aren’t yet equipped to move our entire food supply chain indoors. There isn’t enough desalinated water available to irrigate the world’s crops, nor is the infrastructure there to deliver it.

While it’s likely that we’ll see a grain shortage in 2023 that will push prices up, continuous extreme weather events are disrupting our traditional growing areas, and that will drive the prices of food even higher.  

We can’t move the crops from where they are. Our only option is to follow the weather. The problem is that weather patterns can take decades to form to provide meaningful for data to set up commercial agriculture.

Until next time,

Shae Russell
Co-editor, Exponential Investor