Climate change to affect corn prices, study says
A new study connects the dots on climate change's potential influence on year-to-year swings in corn prices.
According to the research from Stanford and Purdue universities, unless farmers develop more heat-tolerant corn varieties or gradually move corn production from the United States into Canada, frequent heat waves will cause sharp price spikes.
The New York Times reported that the findings indicate that climate change is likely to have far greater influence on the volatility of corn prices over the next three decades than factors that recently have been blamed for price swings — like oil prices, trade policies and government biofuel mandates.
From the Times article:
Noah S. Diffenbaugh, a climate scientist at Stanford and an author of the study, said he was surprised by the notable effect of climate change on price volatility for corn, the country’s largest crop. “I really thought climate would be a minor player before we did this analysis,” Professor Diffenbaugh said. “We’re looking at a period over the next three decades or so of moderate global warming, after all.”
Instead, the analysis found that a moderate warming trend was likely to increase the number of days of severe heat in the growing season, thus doubling the volatility of corn yields.
Using economic, climatic and agricultural data, the study found that if climate change stayed within the internationally accepted range of two degrees Celsius over the next 20 years or so, temperature changes would make those heat waves more common.
The researchers then sought to determine how the heat waves would in turn interact with other factors that affect corn prices.
“Energy policy increasingly is important for agriculture,” said Thomas W. Hertel, another author of the study and a professor of agricultural economics at Purdue. Referring to the Environmental Protection Agency and the United States Department of Agriculture, he added: “Ten or 20 years ago, what the E.P.A. and the U.S.D.A. did influenced corn prices. Today, what the Energy Department does also is important.”
The study also found that federal mandates for biofuel production could amplify the effect of climate change on corn price volatility by hampering the market’s ability to adjust to changes in crop yields.
"Our results suggest that energy policy decisions are likely to interact with climate change to affect corn price volatility, and that the market effect of a binding biofuel mandate is likely to intensify as the climate warms," Diffenbaugh said.
An article on the study on the website Science Codex noted that based on this research, corn farmers would have to increase their crops' heat tolerance by as much as 6 degrees Fahrenheit to avoid having to move northward from the current U.S. Corn Belt to near the Canadian border in order to avoid excessive heat extremes.