Climate Action

Extreme weather is driving food prices higher. These 5 crops are facing the biggest impacts

Rice is one of the crops under threat from the effects of climate change.

Rice is one of the crops under threat from the effects of climate change. Image: Unsplash/Sandy Ravaloniaina

Charlotte Edmond
Senior Writer, Forum Agenda
Rebecca Geldard
Senior Writer, Forum Agenda
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This article was originally published in August 2023. It was last updated in February 2024.

  • Over recent years food prices have been inflated by the pandemic and war in Ukraine, while extreme summer temperatures have exacerbated the problem.
  • Soybeans, olive oil, rice, potatoes and cocoa are just some of the crops that have been affected.
  • A World Economic Forum report, Green Returns: Unleashing the Power of Finance for Sustainable Food Systems, calls on the financial sector to direct more resources into helping the food and agriculture sector to become more sustainable.

Shortages and supply issues caused by events including the pandemic and war in Ukraine have been felt through food price inflation for some while now.

But for some foods, the impact of climate change is also making itself felt, through record high temperatures and extreme weather.

It’s entirely usual for food prices to fluctuate alongside the seasons, but the exceptionally hot and dry summer 2023 in Europe, the US, Asia and beyond caused poor harvests and many crops to fail.

The climate crisis is making extreme weather – from heatwaves and droughts to storms and floods – more common, and some crops are more susceptible to these changes than others.

Here are five examples of foods where we are already seeing an impact.

1. Cocoa

In February 2024, cocoa prices globally hit a record high, as crops in West Africa were impacted by dry weather, according to the BBC.

It meant the cost of the chocolate ingredient had doubled since the beginning of 2023.

The two biggest cocoa bean-growing countries - Ghana and Ivory Coast - have been affected by the El Niño weather phenomenon, which causes drier weather.

"Traders are worried about another short production year and these feelings have been enhanced by El Niño that is threatening West Africa crops with hot and dry weather," Jack Scoville, an analyst at Price Futures Group, told the BBC.

2. Olive oil

A long, hot, dry summer in much of the Mediterranean damaged olive trees and caused a poor crop because reduced soil moisture has stunted plants and crops during their crucial growing season.

As a result, prices of olive oil soared to an all-time high. Stock piles are already significantly down on previous years and are likely to run very low before we reach the next harvest.

Between April 2022 and May 2023 average temperatures were up to 2.5°C – and sometimes 4°C – higher than average in countries including Spain, which is one of the world’s most significant producers of olive oil.

This has combined with persistently low rainfall for more than a year to create severe drought. In Andalusia in southern Spain, water reservoirs are down to about 25% of their capacity.

Maps showing how parts of the Mediterranean have experienced increasing levels of drought over recent years.
Large parts of the Mediterranean are experiencing extreme drought. Image: European Commission

3. Rice

From Italy to India, rice farmers have been feeling the effects of climate change on their crops for some years. And the problem is multi-faceted – sometimes it’s drought, sometimes it’s flooding. And rising salinity from water intrusion is also affecting crops.

Italy grows about 50% of the EU’s rice, and is the world’s only grower of many varieties suitable for risotto. But in March 2023, the country warned rice output would fall as it faced a second year of drought.

In July 2023, rice prices in Asia soared to their highest levels in more than two years on concerns the dry weather would damage crops. In India, late and particularly heavy monsoon rains damaged the country’s rice crop causing it to halt exports of some categories of rice.

Export bans were expected to continue into 2024, according to Bloomberg.

The Californian rice belt in the US was severely hit by drought in 2022, with rice growers only planting half as much rice as usual. The long-running drought was estimated to have cost the region $703 million in lost economic activity in 2022, as well as 5,300 lost rice-related jobs.

The start to the 2023 season was more typical, which brought growers some respite, although the effects of the drought continued to be felt further down the supply chain including by millers, dryers, storage facilities and trucking operations.

NASA satellite shots of falling rice yields in California.
Farmers in California planted significantly less rice crop in 2022 – the extent of the change could be seen from space. Image: NASA

4. Soybeans

It’s not just America’s west coast that has seen a shortage of rain. In 2023, the Midwest experienced its worst drought since 2012, which affected soybean production.

An estimated 4.16 billion bushels of soybeans were produced in the US last year, a drop of almost 106 million bushels compared to the previous year.

Production of soybeans in the US from 2001 to 2023.
Soybean production in the US has dropped in the past few years. Image: Statista

Soybean production is also significantly down in other places. In Argentina, for example, the drought saw the volume of crushed soybeans fall 27% year-on-year in the period between January and August 2023 - to its lowest level since 2015.

It had to import a record amount of the crop from neighbouring countries Paraguay, Bolivia and Brazil, in order to keep its crushing factories open.

As of January 2023, damage to various crops, including wheat, soybean and corn in Argentina, have led to estimated losses of $10.4 billion.

Have you read?

Although soy oil is used as an ingredient in a variety of products, the vast majority of the world’s soybean crop is used for livestock feed.

A shortage or poorer quality livestock feed can cause prices to spike, leading farmers to difficult decisions about reducing herd sizes or finding alternative food sources, for example. This in turn feeds into the price, availability and quality of meats or dairy products down the line.

5. Potatoes

Europe, however, has experienced the opposite problem. Heavy rains in Belgium, France, and the UK in autumn 2023 drenched potato fields, hindering collection and increasing the risk of crop spoilage, Bloomberg reports.

The Netherlands – Europe's fourth-largest grower in 2022 – and Belgium have been the worst affected. Harvesting on the continent is normally over by late autumn, but on 24 November, around 15% and 11% of potato crops in these countries, respectively, remained uncollected in waterlogged fields, exacerbating supply constraints.

Not surprisingly, European potato prices soared as a result, hitting a 14-year high ahead of the holiday season. December Mintec data showed Maris Piper potatoes – a Christmas dinner staple – were up 158% on last year, at £465 per tonne.

The wet weather also threatened Europe's sugar beet crop and slowed winter grain sowing in France, which accounts for 17% of all agricultural production in the European Union.

A sign of things to come?

As the impacts of the climate crisis intensify, bringing with them more extreme weather, the concern is that the devastating impacts seen on crops this summer are only the start. A study by NASA suggests maize crop yields could be down 24% by 2030 as a result of climate change.

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Much research time and money is being devoted to mitigating the effects of a changing climate on crops. This includes more resilient and better adapted crops, better and more efficient water use, and more effective and targeted fertilizers, for example.

It also is important to note that the agricultural sector itself is a significant contributor to greenhouse gas emissions – food systems account for around a third of global emissions. However, comparatively little finance is being directed towards solving this. Just under 4% of climate finance is allocated to agriculture and food, according to The World Economic Forum’s paper Green Returns: Unleashing the Power of Finance for Sustainable Food Systems.

The paper calls on the finance community to reshape its strategies and highlights five pivotal financial vehicles that could be used to bring about equitable and sustainable change.

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