Taking stock of volatile weather
by Cedric Porter
Farm Volatility – Stocks
Much has been said about the tenth anniversary of the financial crisis, but it is easy to forget that there was a food crisis at the same time, with stocks of grains falling to their lowest levels for more than a decade in 2007/08. The response by the world’s farmers to the lack of food was remarkable with grain production up 6.5% between 2007 and 2008 and consistent gains since adding to the world’s stocks, resulting in the world having unprecedented volumes of food.
But there is never any room for complacency in agriculture. Continued record usage of grains and a series of weather events across the world this year has seen production gains stall and stocks slip, with the US Department of Agriculture estimating that the key stocks-to-use ratio down from a record 24.8% a year ago to 22% this year. Wheat stocks are at a five-year low, with 40% of those stocks held in China. The reduction in stocks has helped push up UK wheat price by a fifth this year. The world is far from running out of food, but the drop in stocks is a reminder to the world not to take the production of its food for granted.
This year’s European drought was intense and long-lasting, but it was part of a pattern of increasingly extreme weather. In the last six years there have been just 13 months where English rainfall has been within 10% of the long-term average for that month, according to Environment Agency records. In June 2012 245% of the normal rainfall for the month fell, while in June this year just 24% fell. Meanwhile, this year has seen the highest temperatures ever recorded in regions as diverse as Northern Scandinavia, West Africa, Eastern Europe, The Arabian Peninsula, Canada, India and South East Asia.
The recent UN IPCC report on climate change warned of the dangers of a warming world, urging immediate action to keep temperatures within 1.5°C of pre-industrial levels or there is a danger we could see catastrophic consequences within a few years. Melting ice caps and increasingly acidic seas are expected to impact on the world’s ability to produce its staples of wheat, rice and maize, while the report’s authors say that an area the size of Australia may be needed to grow energy crops and the world should reduce its intake of animal-based products.
Faced with such global issues, it is easy for individual farmers to say: ‘but what can I do?’ However, if they do not try and answer that question by growing more resilient crops that can withstand greater periods of wet and warmth, then both their own businesses and the health of the world could be affected.
Cedric Porter is an agricultural supply chain journalist and consultant and editor of World Potato Markets and Brexit Food and Farming newsletters. http://www.supplyintelligence.co.uk