Impacts of climate and price changes on global food production

Abstract

Agriculture is one of the key drivers and victims of climate change. Climate-resilient agriculture is therefore vital for achieving enhanced food security—which is a crucial component of the sustainable development goals (SDGs). This paper provides answers to questions that are prerequisite for policies that address agriculture and climate change. We analyze the determinants of global average crop production for maize, wheat, rice, and soybeans over the period 1961–2013. We find strong and statistically significant supply elasticities for all four crops with respect to own crop prices. Our results also underscore the relevance of output price volatility for the supply of these key global agricultural staple crops—especially on production of wheat and maize. Comparing the standardized effect sizes of own price and price volatility estimates, the effects are on par for wheat production while the price volatility effect is only a fifth of the own price effect on maize production. In agreement with previous studies, we also find that climate change has significant adverse effects on production of the world’s key staple crops. More importantly, this study finds that weather extremes—both in terms of temperature and precipitation shocks— during the growing months have significant adverse impacts on the production of the abovementioned food crops. Price and weather extremes do not only adversely affect average global food production, they also positively contribute to the year-to-year fluctuations of food availability. Thus, combating climate change using both mitigation and adaptation technologies is crucial for global production and hence food security.