Get used to skyrocketing food prices: Extreme weather conditions persist, but climate is not the only culprit

Get used to skyrocketing food prices: Extreme weather conditions persist, but climate is not the only culprit
Get used to skyrocketing food prices: Extreme weather conditions persist, but climate is not the only culprit
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Devastating heat. Debilitating droughts. Exhausting frosts. Extreme weather creates nightmares for farmers around the world - and makes food more expensive for Americans, writes CNN, but global price increases will affect not only the "unique nation", but also the inhabitants of all other "non-unique" countries in the world. According to the Food and Agriculture Organization of the United Nations, over the past year, world food prices have risen by 31%.

Arabica coffee futures have nearly doubled over the past year to seven-year highs as Brazil grapples with a frost that wiped out the crop. Coffee retail prices are likely to follow suit.

Sugar prices are also rising, fueled by freezing temperatures in Brazil and dry weather in the Dakotas and the Red River Valley. Wheat prices, one of the most common food sources for the average diet, rose to their highest levels in nearly eight years amid soaring temperatures and droughts.

The surges in food prices demonstrate how extreme weather conditions, largely driven by the climate crisis, are having a real impact on Americans. And climatologists warn that further the consequences will only intensify.

"Climate change is coming straight to our dining tables," Cynthia Rosenzweig, a senior fellow at Columbia University's Earth Institute, told CNN Business.

Extreme weather conditions drive prices up

The cost of sugar and coffee is skyrocketing as extreme weather conditions affect agriculture around the world. Over the past year, sugar and coffee futures have risen in price by more than 50%. The Bloomberg Commodity Index, which tracks the prices of food, energy and materials, rose nearly 35%.

According to the Food and Agriculture Organization of the United Nations, over the past year, world food prices have risen by 31%. Supply shortages caused by extreme weather conditions are one of several factors driving this food inflation.

“There is no doubt that changes in weather conditions are affecting food supplies,” said Jennifer Bartauschus, senior analyst with Bloomberg Intelligence specializing in staple foods and packaged foods.

Robert Jauger, a 35-year-old commodity veteran, is familiar with the agricultural price boom. But unlike previous booms, this one isn't driven by typical factors like demand in emerging markets or a weak US dollar.

“In the past, there hasn't been a climate catastrophe that turned everything upside down,” says Jauger, chief executive of energy futures at Mizuho Securities. "I've never seen anything like it."

According to Swiss Re, the world's largest reinsurance company, in the first half of 2021 alone, losses from natural disasters amounted to $ 40 billion. This is the second largest amount in history.

Of course, not all extreme weather conditions are caused by the climate crisis

For example, some changes in weather conditions could be caused by La Nina, said Rosenzweig, a Columbia University professor who is also a senior research fellow at NASA's Goddard Institute for Space Research.

Lack of labor, rising transportation costs

The rise in food prices can be driven by many factors, some of which have nothing to do with climate change.

For example, in some cases food inflation is driven by labor shortages, including in the agricultural sector amid the pandemic and the Trump administration's restrictions on immigration. Transportation costs are also high due to rising oil prices and a shortage of truck drivers. This is not to mention the increase in the cost of packaging.

Consumer prices are up 5.4% in the 12 months ended July, according to government statistics released Wednesday. This corresponds to the fastest annual price jump since 2008. Producer prices rose even faster in July, setting a record for the second consecutive month.

“I have been in the industry for 38 years and this is the highest inflation rate in our company,” said Orlando Oleive, senior director of operations for New York-based supermarket Morton Williams. "It's incredible how many things have risen in price now."

93% of wheat is poorly maintained in Washington state

Wheat prices are rising in part due to "concerns about dry weather and crop conditions in North America," according to the UN Food Agency. In particular, droughts in Canada and the northwestern United States have wiped out wheat crops.

The latest crop report released by the USDA says only 11% of spring wheat in six US states is in good or excellent condition. This is less than 69% a year ago.

In Washington state, 93% of spring wheat is in poor or very poor condition due to drought, according to the Drought Monitor.

“It was destroyed. Day after day, crops are getting temperatures never seen before,” Jauger said.

'Complete crop failure'

More than 95% of the western United States is currently in drought

"The droughts have led some farmers to completely stop growing some crops - a complete crop failure," Rosenzweig said.

Climate change is increasing the frequency and severity of droughts, according to the United Nations Intergovernmental Panel on Climate Change. A report released by the group this week says droughts, which previously only happened once in a decade, now occur 70% more often globally.

Chris Field, a professor of climate change at Stanford University, worries about how droughts and water shortages in California and the West will affect the supply of nuts, fruits and vegetables to America.

"So far, we are not seeing widespread increases in food prices for American consumers," Field wrote in an email. "But as extreme events become more frequent, the risk becomes more real."

Coffee and sugar prices are rising

But it's not just warm conditions that affect food supplies

According to a study by Texas A&M University, deep freeze in Texas earlier this year resulted in agricultural losses of at least US $ 600 million. This included the loss of livestock, citrus fruits and vegetables.

Very coldy damaged coffee crops in Brazil, raising fears of a serious decline in production.

Unfortunately, these climate-induced crop problems will only exacerbate the price shock that has swept America.

"If demand stays the same or even rises as restaurants open and supply is limited, this will naturally lead to higher prices, which the consumer ultimately pays," said Bartaschus, an analyst at Bloomberg Intelligence.

Even before unusually cold temperatures in Brazil, US retail coffee prices rose in part due to a drought in Brazil. The average ground coffee price in April reached $ 4.75 a pound, the highest in nearly six years, according to the Bureau of Labor Statistics.

Although coffee prices have retreated since then, frost in Brazil threaten to reverse this process.The impact on consumers may not be immediate due to the way large companies purchase coffee beans (and other commodities).

Starbucks (SBUX) said last month that consumers will not be forced to spend more on coffee as the company buys coffee beans in advance and fixes prices.

There is little doubt, at least for Jauger, that climate change is to blame for the simultaneous impact on different cultures.

"The odds of all of these parts working against the crop are one in a million," he says. "Evidence that this change in weather is overwhelming."

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