{"id":21354,"date":"2012-04-23T11:18:47","date_gmt":"2012-04-23T18:18:47","guid":{"rendered":"http:\/\/blogs.kqed.org\/climatewatch\/?p=21354"},"modified":"2012-04-23T11:18:47","modified_gmt":"2012-04-23T18:18:47","slug":"climate-corn-and-the-coming-market-chaos","status":"publish","type":"post","link":"https:\/\/ww2.kqed.org\/climatewatch\/2012\/04\/23\/climate-corn-and-the-coming-market-chaos\/","title":{"rendered":"Climate, Corn, and the Coming Market Chaos"},"content":{"rendered":"

Climate change has an outsize effect on corn price volatility<\/strong><\/p>\n

\"\"
Climate change -- and the ensuing heat waves -- will create more volatility in the corn price market. <\/figcaption><\/figure>\n

By Michael D. Lemonick<\/a><\/p>\n

Farmers know all too well that the prices they get for what they grow can fluctuate from one year to the next, sometimes wildly. Drought or heat can reduce crop yields; so can frost and floods. For corn producers, the Renewable Fuel Standard<\/a>, which mandates the addition of ethanol to gasoline, is yet another source of volatility. It puts extra demands on whatever supply there is, making corn more expensive for consumers even as it puts more money in farmers\u2019 pockets. And overlaid on top of it all is climate change, which exerts its on push on the ups and downs of weather.<\/p>\n

Scientists have looked at different pieces of this equation, but researchers from Stanford and Purdue have analyzed the entire equation, in a paper just published in Nature Climate Change<\/em><\/a>, <\/em>and determined which factor causes the most trouble: it\u2019s climate change, and for Stanford\u2019s Noah Diffenbaugh<\/a>, that came as a surprise. \u201cI genuinely expected that climate would be a minor player relative to these other influences,\u201d he said in a telephone interview.<\/p>\n

<\/p>\n

The reason, he explained, is that the study looked out only about 30 years, a time when most climate models project that the temperature should only have risen by about 1\u00b0C, or 1.6\u00b0F, above where it is now. \u201cMy expectation,\u201d Diffenbaugh said, \u201cwas that on that time scale, socioeconomic policy\u201d \u2014 in other words, biofuel mandates, which almost entirely apply to corn-based ethanol \u2014\u00a0 \u201cwould have a much greater influence.\u201d<\/p>\n

Climate\u2019s outsize effect on the volatility of corn prices comes from the fact that warming temperatures trigger extreme events<\/a>, including severe heat waves. \u201cWarmer temperatures actually lead to greater crop yields,\u201d Diffenbaugh said, \u201cbut only up to a point.\u201d If the mercury rises too high, yields plummet. \u201cEven over the next three decades,\u201d he said, \u201cinstances of extreme heat during the growing season are projected to become more common. There will be many more bad years.\u201d<\/p>\n

There will also be good years, where prices drop. But the swings between them will be greater than they are now, making the corn market more unstable. That\u2019s bad news for farmers and consumers alike. And because biofuel mandates divert some of the crop even whether it\u2019s a good or a bad year, that just adds extra stress.<\/p>\n

\u201cBy limiting the ability of commodity markets to adjust to yield fluctuations, biofuels mandates work in exactly the wrong direction,” Thomas Hertel, a Purdue agricultural economist and Diffenbaugh\u2019s co-author, said in a statement. When oil prices are high, moreover, the demand for biofuel becomes even greater, and the problem gets even worse.<\/p>\n

Since the warming expected by 2040 is already built into the climate system thanks to the greenhouse gases already in the atmosphere, reducing emissions wouldn\u2019t have any effect on the study\u2019s results (although they undoubtedly would in a study that went out to the end of the century).<\/p>\n

Given climate\u2019s outsize influence on volatility, the authors say, the only options are to breed corn with up to an extra 6\u00b0F of heat tolerance, or prepare for the corn belt to move north to the Canadian border.<\/p>\n

A version of this post also appears at<\/em> Climate Central<\/a>, Climate Watch’s content partner.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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