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Corn Production Shocks in 2012 and Beyond: Implications for Food Price Volatility

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  • Steven T. Berry
  • Michael J. Roberts
  • Wolfram Schlenker

Abstract

Corn prices increased sharply in the summer of 2012 due to expected production shortfalls in the United States, which produces roughly 40% of the world's corn. A heat wave in July adversely affected corn production. We extend earlier statistical models of county-level corn yields in the Eastern United States by allowing the effect of various weather measures to vary in a flexible manner over the growing season: Extreme heat is especially harmful around a third into the growing season. This is the time when the 2012 heat wave hit the Corn Belt. Our model predicts 2012 corn yields will be 23% below trend. While extreme heat was significantly above normal, climate change scenarios suggest that the 2012 outcomes will soon be the new normal.

Suggested Citation

  • Steven T. Berry & Michael J. Roberts & Wolfram Schlenker, 2012. "Corn Production Shocks in 2012 and Beyond: Implications for Food Price Volatility," NBER Working Papers 18659, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:18659
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    References listed on IDEAS

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    1. Ariel Ortiz-Bobea & Richard E. Just, 2013. "Modeling the Structure of Adaptation in Climate Change Impact Assessment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(2), pages 244-251.
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    Cited by:

    1. Gammans, Matthew & Mérel, Pierre & Ortiz-Bobea, Ariel, 2016. "The impact of climate change on cereal yields: Statistical evidence from France," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236322, Agricultural and Applied Economics Association.
    2. Daniel Cooley & Steven M. Smith, 2022. "Center Pivot Irrigation Systems as a Form of Drought Risk Mitigation in Humid Regions," NBER Chapters, in: American Agriculture, Water Resources, and Climate Change, pages 135-171, National Bureau of Economic Research, Inc.
    3. Bucheli, Janic & Dalhaus, Tobias & Finger, Robert, 2022. "Temperature effects on crop yields in heat index insurance," Food Policy, Elsevier, vol. 107(C).
    4. Woodard, Joshua D. & Chiu Verteramo, Leslie & Miller, Alyssa P., 2015. "Adaptation of U.S. Agricultural Production to Drought and Climate Change," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205903, Agricultural and Applied Economics Association.
    5. Jesse B. Tack & Matthew T. Holt, 2016. "The influence of weather extremes on the spatial correlation of corn yields," Climatic Change, Springer, vol. 134(1), pages 299-309, January.
    6. Joseph Cooper & A. Nam Tran & Steven Wallander, 2017. "Testing for Specification Bias with a Flexible Fourier Transform Model for Crop Yields," American Journal of Agricultural Economics, John Wiley & Sons, vol. 99(3), pages 800-817, April.
    7. Jeonghyun Kim & Hojeong Park & Jong Ahn Chun & Sanai Li, 2018. "Adaptation Strategies under Climate Change for Sustainable Agricultural Productivity in Cambodia," Sustainability, MDPI, vol. 10(12), pages 1-18, December.
    8. Adrian D. Lubis & Dian V. Panjaitan, 2012. "Volatility of volume imports of major food commodities in Indonesia," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 4(2), pages 127-142, April.

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    More about this item

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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