Weather is the most important variable in agriculture. This fact is becoming more obvious in this Era of Extremes, a phrase used to describe the increase in climate driven extreme events (coined by Everstream’s Applied Meteorology and Climate team years ago). More extreme weather fluctuations are impacting global agriculture in distinct and unique ways.
Over the past few years, when Everstream has covered food and beverage industry challenges the focus has been on heat and drought. Higher temperatures are stunting growing areas in Central America, Southeast Asia, parts of Africa, South and North America, and the Mediterranean region. The resulting crop stress creates immense strain on the global food supply, increases food security issues, and is at the core of the inflationary pressures that weigh on much of the food supply chain.
Climate change and humidity create “sogflation”
“Heatflation” and resulting droughts have driven spikes in food prices during the past five years, but get ready for the other end of the climate change spectrum: “sogflation.” Sogflation is the impact of extreme and excess precipitation on agriculture. It drives price increases from too much rainfall, especially at the wrong times.
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Ironically, both drought and humidity are increasing. Sogflation is a result of rising ocean temperatures, which have been mounting for many decades and spiked to record levels during the past few years. As the global oceans warm so does the amount of moisture in the atmosphere.
Figure 1: Climate changes in atmospheric moisture since 1940; the areas in green depict an increasing trend in humidity while brown areas show a decreasing trend (source: Everstream Analytics).
The amount of moisture in the atmosphere has steadily increased over the past six to eight decades. Recently, humidity levels spiked even higher as sea surface temperatures (SST) accelerated. Simply, the amount of moisture in the atmosphere is higher now than it has ever been.
Humidity’s impact on food supplies
So, how does rising sogflation disrupt the food industry? Short-term flood events, local and/or regional, are more numerous and greater in magnitude. Sustained periods of unusually wet weather are also more common. This is happening virtually everywhere, so all areas of the globe are feeling the impacts, not just areas near the oceans.
The increase in wetness problems not only impacts quality and size of agricultural products but also logistics. Once harvested, crops must be transported and the increase in flooding events has disrupted rail and road travel, port operations, and facilities in areas that have experienced flooding. In some ways, the wetness issues are more far reaching than heat/dryness problems due to the logistical challenges of a wetter world.
Figure 2: Due to climate change, global atmospheric moisture (humidity) has trended higher from 1940 to 2023 (source: Everstream Analytics).
Higher humidity threatens the food and beverage industry in several ways.
Obviously, more flooding has a major impact on crops. For example, historic flooding in Brazil’s southernmost state of Rio Grande do Sul damaged soybeans during the harvest – and Brazil is the largest soybean producer in the world. Floods in southern China impacted rice, sugarcane, and oilseeds. In northern and western Europe, months of sustained heavy rainfall flooded already saturated fields, damaging early growth of spring wheat, barley, butter, potatoes, and feed for livestock.
Moisture damage impacts both crop production and quality. Wet conditions at the wrong time can create conditions that significantly impact food and beverage manufacturing. This is especially the case during maturation and harvest when wet conditions cause quality degradation due to rot and mold along with a reduction in the storage times of harvested crops. The impacts differ for each individual crop – some crops are much more vulnerable to excess water than others.
Once harvested, crops must be transported. The increase in flooding events has disrupted rail and road travel, port operations, and facilities. These logistical challenges of a wetter world make sogflation-related disruption more far reaching than heat and dryness problems.
Climate change and humidity outlook
Wouldn’t it be great if the excess humidity would wander over to the drought areas and even things out? Unfortunately, it doesn’t work that way – wet areas are getting wetter while drought-prone regions are even more parched. In managing supply chains, there’s no one-size-fits-all risk solution because one supplier could face drought while another faces serious floods. Risks to agriculture are occurring more frequently and at a higher magnitude for both heatflation and sogflation.
Most of the globe has experienced an increase in humidity levels since the middle of last century. As one would assume, the tropics are the area that have the most significant upward trend. The area with the largest increase is Southeast Asia. The only regional area that has experienced a decrease in humidity is the northwest portion of Argentina (near the Andes).
There is no indication of a fundamental change in the earth’s oceans anytime soon. As long as the oceans remain at record warm levels, these risks will continue and likely accelerate.
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Jon Davis leads the Everstream Analytics weather and climate team as Chief Meteorologist. With over 35 years of experience, he is widely considered one of the foremost experts on the impact of weather and climate on global commodities and business.