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Weather Shocks And Inter-Hemispheric Supply Responses: Implications For Climate Change Effects On Global Food Markets

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  • TRAVIS J. LYBBERT

    (Agricultural and Resource Economics, University of California, Davis, Giannini Foundation of Agricultural Economics, One Shields Ave, Davis, CA 95616, USA)

  • AARON SMITH

    (Agricultural and Resource Economics, University of California, Davis, Giannini Foundation of Agricultural Economics, One Shields Ave, Davis, CA 95616, USA)

  • DANIEL A. SUMNER

    (Agricultural and Resource Economics, University of California, Davis, Giannini Foundation of Agricultural Economics, One Shields Ave, Davis, CA 95616, USA)

Abstract

Climate models predict more weather extremes in the coming decades. Weather shocks can directly reduce crop production, but their effect on food markets is partly buffered by storage and supply responses that can be complex and nuanced. We explore how inter-hemispheric trade and supply responses can moderate the effects of weather shocks on global food supply by enabling potential intra-annual arbitrage. Our estimates of this effect in the case of wheat and soybeans suggest that it may be considerable: 25–50% of crop production lost to a shock in the Southern Hemisphere is offset six months later by increased production in the North. These results have implications for the potential effects of climate change on global food markets, for how we model these interactions and, possibly, for the design of trade and production-related policies that aim to leverage this inter-hemispheric buffer more effectively.

Suggested Citation

  • Travis J. Lybbert & Aaron Smith & Daniel A. Sumner, 2014. "Weather Shocks And Inter-Hemispheric Supply Responses: Implications For Climate Change Effects On Global Food Markets," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 5(04), pages 1-11.
    • Handle: RePEc:wsi:ccexxx:v:05:y:2014:i:04:n:s2010007814500109
    DOI: 10.1142/S2010007814500109
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    1. Nelson, Gerald C. & Rosegrant, Mark W. & Palazzo, Amanda & Gray, Ian & Ingersoll, Christina & Robertson, Richard & Tokgoz, Simla & Zhu, Tingju & Sulser, Timothy B. & Ringler, Claudia & Msangi, Siwa & , 2010. "Food security, farming, and climate change to 2050: Scenarios, results, policy options," Research reports Gerald C. Nelson, et al., International Food Policy Research Institute (IFPRI).
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    Cited by:

    1. Chen, Bowen & Villoria, Nelson B., 2018. "Food Price Variability and Import Dependence: A Country Panel Analysis," 2018 Annual Meeting, August 5-7, Washington, D.C. 274285, Agricultural and Applied Economics Association.
    2. Shon M Ferguson & Johan Gars, 2020. "Measuring the impact of agricultural production shocks on international trade flows," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 47(3), pages 1094-1132.
    3. Chatzopoulos, T. & Perez Dominguez, I. & Zampieri, M. & Toreti, A., 2018. "Agricultural commodity market responses to extreme agroclimatic events," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276039, International Association of Agricultural Economists.
    4. Bednar-Friedl, Birgit & Knittel, Nina & Raich, Joachim & Adams, Kevin M., 2022. "Adaptation to transboundary climate risks in trade: investigating actors and strategies for an emerging challenge," LSE Research Online Documents on Economics 113693, London School of Economics and Political Science, LSE Library.
    5. Ali, Daniel Ayalew & Deininger, Klaus & Monchuk, Daniel, 2020. "Using satellite imagery to assess impacts of soil and water conservation measures: Evidence from Ethiopia’s Tana-Beles watershed," Ecological Economics, Elsevier, vol. 169(C).
    6. Arellano Gonzalez, Jesus, 2018. "Estimating climate change damages in data scarce and non-competitive settings: a novel version of the Ricardian approach with an application to Mexico," 2018 Annual Meeting, August 5-7, Washington, D.C. 274010, Agricultural and Applied Economics Association.
    7. Aled W. Jones & Alexander Phillips, 2016. "Historic Food Production Shocks: Quantifying the Extremes," Sustainability, MDPI, vol. 8(5), pages 1-10, April.
    8. Bertone Oehninger, Ernst & Lin Lawell, C.-Y. Cynthia & Sanchirico, James & Springborn, Michael, 2016. "The effects of climate change on groundwater extraction for agriculture and land-use change," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235724, Agricultural and Applied Economics Association.

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