Impact of Climate Change, Weather Extremes, and Price Risk on Global Food Supply

Abstract

We analyze the determinants of global crop production for maize, wheat, rice, and soybeans over the period 1961–2013. Using seasonal production data and price change and price volatility information at country level, as well as future climate data from 32 global circulation models, we project that climate change could reduce global crop production by 9% in the 2030s and by 23% in the 2050s. Climate change leads to 1–3% higher annual fluctuations of global crop production over the next four decades. We find strong, positive and statistically significant supply response to changing prices for all four crops. However, output price volatility, which signals risk to producers, reduces the supply of these key global agricultural staple crops—especially for wheat and maize. We find that climate change has significant adverse effects on production of the world’s key staple crops. Especially, weather extremes— in terms of shocks in both temperature and precipitation— during crop growing months have detrimental impacts on the production of the abovementioned food crops. Weather extremes also exacerbate the year-to-year fluctuations of food availability, and thus may further increase price volatility with its adverse impacts on production and poor consumers. Combating climate change using both mitigation and adaptation technologies is therefore crucial for global production and hence food security.

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Notes

  1. 1.

    We apply calories per kilogram of 3340 for wheat, 3560 for maize, 3350 for soybeans and 3600 for rice (FAO 2016). Estimations with equal weights also yield similar results.

  2. 2.

    These threshold values are in degree Celsius of 30 for wheat and 32 for each of the other three crops (Thornton and Cramer 2012).

  3. 3.

    Summary statistics of all remaining crop production datasets are available as supplementary material (tables S1- S3).

  4. 4.

    To keep tables 3- 6 in a reasonable size, we only present estimations of key variables in these tables. For a complete presentation of estimations, see tables S4- S7 in the supplementary material.

  5. 5.

    These statistics are available as a supplementary material (table S8).

  6. 6.

    We used econometric estimates from FEIV’ model results above. Note that we predict the potential effects of climate change in 2030 and 2050 without accounting for projected price changes.

  7. 7.

    The weights are the global production share of each crop.

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Correspondence to Mekbib G. Haile.

Electronic supplementary material

Table S1

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Table S2

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Table S3

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Table S4

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Table S5

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Table S6

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Table S7

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Table S8

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Haile, M.G., Wossen, T., Tesfaye, K. et al. Impact of Climate Change, Weather Extremes, and Price Risk on Global Food Supply. EconDisCliCha 1, 55–75 (2017). https://doi.org/10.1007/s41885-017-0005-2

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Keywords

  • Food supply
  • Climate change
  • Weather extremes
  • Price volatility
  • Staple crops
  • Global

JEL Classifications

  • Q11
  • Q15
  • Q54