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, 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’ pockets. And overlaid on top of it all is climate change, which exerts its on push on the ups and downs of weather.
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, and determined which factor causes the most trouble: it’s climate change, and for Stanford’s Noah Diffenbaugh, that came as a surprise. “I genuinely expected that climate would be a minor player relative to these other influences,” he said in a telephone interview.
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°C, or 1.6°F, above where it is now. “My expectation,” Diffenbaugh said, “was that on that time scale, socioeconomic policy” — in other words, biofuel mandates, which almost entirely apply to corn-based ethanol — “would have a much greater influence.”
Climate’s outsize effect on the volatility of corn prices comes from the fact that warming temperatures trigger extreme events, including severe heat waves. “Warmer temperatures actually lead to greater crop yields,” Diffenbaugh said, “but only up to a point.” If the mercury rises too high, yields plummet. “Even over the next three decades,” he said, “instances of extreme heat during the growing season are projected to become more common. There will be many more bad years.”
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’s bad news for farmers and consumers alike. And because biofuel mandates divert some of the crop even whether it’s a good or a bad year, that just adds extra stress.
“By 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’s 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.
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’t have any effect on the study’s results (although they undoubtedly would in a study that went out to the end of the century).
Given climate’s outsize influence on volatility, the authors say, the only options are to breed corn with up to an extra 6°F of heat tolerance, or prepare for the corn belt to move north to the Canadian border.