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Climate Change and Grain Price Volatility: Empirical Evidence for Corn and Wheat 1971–2019

Author

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  • Marie Steen

    (School of Economics and Business, Norwegian University of Life Sciences, 1433 Ås, Norway)

  • Olvar Bergland

    (School of Economics and Business, Norwegian University of Life Sciences, 1433 Ås, Norway
    School of Economic Sciences, Washington State University, Pullman, WA 99163, USA)

  • Ole Gjølberg

    (School of Economics and Business, Norwegian University of Life Sciences, 1433 Ås, Norway)

Abstract

It is widely recognized that climate change makes the weather more erratic. As the combination of temperature and precipitation is a major driver of grain crop productivity, more frequent extreme rainfalls and heat waves, flooding and drought tend to make grain production and hence grain prices more volatile. We analyze daily prices during the growing season for corn and wheat over the period 1971–2019 using an EGARCH model. There have been occasional spikes in price volatility throughout this period. We do not, however, find that grain prices have become more volatile since the 1970s, with an exception for a small but statistically significant upward trend in wheat price volatility. To the extent that climate change has caused more frequent weather extremes affecting crop yields, it appears that the price effects have been softened, most likely through farmers’ adaption to climate changes, introduction of more stress-tolerant hybrids, storage, regional and international trade and risk management instruments.

Suggested Citation

  • Marie Steen & Olvar Bergland & Ole Gjølberg, 2023. "Climate Change and Grain Price Volatility: Empirical Evidence for Corn and Wheat 1971–2019," Commodities, MDPI, vol. 2(1), pages 1-12, January.
    • Handle: RePEc:gam:jcommo:v:2:y:2023:i:1:p:1-12:d:1026795
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    References listed on IDEAS

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    Cited by:

    1. Abhishek Yadav, 2024. "A Comparative Study of Time Series, Machine Learning, and Deep Learning Models for Forecasting Global Price of Wheat," SN Operations Research Forum, Springer, vol. 5(4), pages 1-24, December.
    2. Yutian Miao & Siyan Liu & Xiaojuan Dong & Gang Lu, 2025. "Grain Price Fluctuation: A Network Evolution Approach Based on a Distributed Lag Model," Computational Economics, Springer;Society for Computational Economics, vol. 65(6), pages 3651-3671, June.
    3. Yuliia Zolotnytska & Stanisław Kowalczyk & Roman Sobiecki & Vitaliy Krupin & Julian Krzyżanowski & Aleksandra Perkowska & Joanna Żurakowska-Sawa, 2025. "Drivers of Global Wheat and Corn Price Dynamics: Implications for Sustainable Food Systems," Sustainability, MDPI, vol. 17(19), pages 1-19, September.
    4. Mihai Dinu & Silviu Ionuț Beia & Simona Roxana Pătărlăgeanu & Alina Florentina Gheorghe & Irina Denisa Munteanu & Mihail Dumitru Sacală, 2025. "Exploring the Impact of Wheat Prices and Annual Income on Pig Carcass Prices in European Countries: A Spatial Panel Regression Analysis," Agriculture, MDPI, vol. 15(21), pages 1-14, October.

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