New research shows how simultaneous drought across the world’s major wheat regions could send shocks through global markets and food systems.
Bread, pasta and breakfast cereals may seem far removed from dry fields in North America, Europe or Asia. However, when water shortages strike several of the world’s major wheat-growing regions simultaneously, the effects can reach supermarket shelves and bakery aisles.
That is the conclusion of a new international study published in Earth’s Future. Researchers combined climate data, crop production areas and global commodity prices to examine how drought affects wheat markets worldwide.
The findings show that the extent of severe water scarcity alone can explain approximately 74% of annual fluctuations in global wheat prices between 2000 and 2021.
Professor Jørgen E. Olesen, head of the Department of Agroecology at Aarhus University, is among the study’s co-authors.
“We already know that climate change affects agricultural production. What is new here is that we can document a clear link between widespread drought across the globe and the prices faced by consumers and food markets,” he says.
Measuring Water Scarcity Across Multiple Regions
The researchers developed an indicator called Severe Water Scarcity, or SWS. It measures the proportion of global cropland experiencing drought during the months when crops are most sensitive to water shortages, according to a press release.
Rather than examining drought conditions in individual locations, the approach considers what happens when several major agricultural regions experience drought simultaneously or in quick succession. These compound drought events are expected to become more common as the climate warms.
Wheat stood out from the other crops studied. Researchers found that the relationship between water scarcity and prices was considerably stronger for wheat than for maize. They found no comparable relationship for rice.
Wheat-Growing Areas Face Increasing Water Stress
Historical data show that approximately 5% of the world’s wheat-growing area has experienced severe water scarcity in an average year. However, that share has increased alongside climate change.
During particularly dry years, including 2000, 2010, 2012 and 2020, severe water scarcity affected more than 15% of the global wheat-growing area.
The researchers then used climate models to investigate how the trend could develop in the future. Their findings suggest that severe water scarcity will affect increasingly large portions of the world’s wheat-growing regions as temperatures rise.
Wheat Prices Could Climb With Global Temperatures
At approximately 2 degrees of global warming, the model estimates an average wheat price of about $273 per metric ton. At 3 degrees of warming, the estimated price increases to roughly $364 per metric ton.
That would be approximately three times the inflation-adjusted global wheat price recorded in 2010.
“Wheat is one of the world’s most important food crops, which means climate-related production problems can quickly have global consequences. This study shows that we need to view drought as an international challenge rather than a series of isolated local events,” says Jørgen E. Olesen.
Other Factors Continue to Influence Wheat Markets
The researchers emphasize that drought is not the only factor affecting wheat prices. Energy and fertilizer costs, grain stocks, trade policies and geopolitical conflicts also play significant roles.
However, the study identifies a climate-related market driver that has previously been difficult to quantify and appears to be influencing global wheat prices already. This makes the findings relevant well beyond the agricultural sector.
Wheat is a staple food for billions of people. When drought strikes several major production regions at the same time, the effects can ripple through international markets and reach countries and households far from the areas where rainfall failed.
Food Security Assessments Must Consider Compound Droughts
The study suggests that future food security assessments should look beyond gradual changes in crop yields.
Researchers say assessments should also consider severe and recurring drought events that affect multiple major production regions simultaneously or within short periods. Understanding these interconnected climate risks could help governments and food systems prepare for the resulting effects on wheat supplies and prices.
