CHICAGO, Ill. — Farming is a risky business that is going to get riskier, says a senior grain industry executive.
“Mark Twain famously said farming is gambling with dirt, and I think we can all agree in this room that climate change further loads our dice,” Cargill executive director Greg Page told DTN’s Ag Summit 2015.
Page is one of 10 board members for the Risky Business Project, which has released a report estimating the economic impact of climate change, including how it will affect agriculture.
“The report says that corn, soybeans, cotton and wheat yields will decline by about 14 percent between now and 2050 and could decline, based on climate alone, by 42 percent by the end of the century without any adaptation,” he said.
Media covering the report picked up on the 14 and 42 percent doom and gloom numbers and ignored the “without any adaptation” caveat.
“I don’t think anybody here in this room is planning to farm without adaptation in the next five years, let alone the next 35 or the next 85,” said Page.
Farmers and technology providers have already demonstrated an ability to adapt. Page grew up on a farm in North Dakota that grew wheat, oats, barley and durum because those were the only crops that could be grown during the 80 to 90 frost-free days of the growing season.
The state now averages nine more frost-free days a year and farmers have more than 20 crops from which to choose.
Cargill recently opened a new crush plant in Camrose, at 54 degrees latitude, and most of the canola is bought from north of that plant.
“If my father were still living and I told him that the company I worked for was building a food processing plant 54 degrees north latitude, he would have thought there was some serious problem,” said Page.
Jim Block, chief meteorologist with Schneider Electric, DTN’s parent company, said there is one climate change weather factor that farmers can count on over the next five years.
“What we’re looking at here is increased volatility,” he said.
There will be more record precipitation episodes, flash droughts, record high temperatures and record lows.
It’s because the warming of the Arctic has created persistent weather patterns. When it gets wet it tends to stay wet, like it has been in eastern Manitoba and western Saskatchewan, and when it is dry it stays dry, like it has been in California.
“Probably the most realistic expectation you can have in agriculture is that you’re going to see more excessive rainfall events,” said Block.
He defined excessive as 25 to 38 millimeters of precipitation.
However, there will also be flash droughts.
“You’re going to see periods in which suddenly the rains just stop and we might go three, four or five weeks without any significant rains,” said Block.
Page said governments can take steps to mitigate some of the risks associated with climate change and ensure there will be enough food to feed the world by 2050. They need to stop masking the signalling power of price with subsidies, tariffs and taxes, he added.
“Prices are the most potent of all fertilizers in motivating farmers to do the right thing,” he said.
Governments need to honour comparative advantage and allow natural exporting regions such as North America and South America to continue trading with natural importing regions such as Asia, sub-Saharan Africa and the Middle East.
There is a growing push toward food self-sufficiency, but the world’s farmers will produce the most food in the most responsible and economical way if crops are grown in the right places.
Food self-sufficiency policies are causing extreme price volatility in modern agriculture. A small increase in production can cause prices to plummet and farmers to grow less food.
Page said China is the best example of a country taking the correct approach. It has a comparative advantage growing starch crops such as wheat and rice but is not well endowed to grow protein crops.
As a result, it decided more than a decade ago to grow cereals and import soybeans.
He said 16 percent of global calories move across international borders. The rest is grown and consumed locally.
“Only 16 percent, yet you often read in the media people decrying the fact that we have a globalized food system,” said Page.
Governments need to continue promoting the sustainable intensification of farming. Farmers have doubled world production since 1975 with little increase in acreage.
“The technology exists to grow more food with the water that we have, using less fertilizers, less herbicides and pesticides and certainly less tillage,” he said.
As well, more flexible renewable fuel policies are needed so that crops are not diverted into non-food uses by rigid dictates during periods of poor harvests.
Page said one big challenge will be convincing governments to adopt the correct policies because climate change is a problem that politics is perfectly designed to ignore.
It’s because the costs of climate change mitigation are immediate while the benefits are far into the future.