More expensive food on the way? New research indicates significant price increases ahead

When water scarcity affects several of the world's most important wheat-producing regions at the same time, the consequences can be felt all the way to the grocery store shelves and bread aisles. This is also the case here in Denmark, when we put bread, pasta, and other wheat-based foods into our shopping carts. We will probably have to get used to this, because human-induced climate change will only worsen water shortages. In a new international study published in the journal Earth's Future, researchers combined climate data, cultivation areas, and global commodity prices to examine how drought affects the world's wheat markets. The result is, according to Aarhus University, startling: The extent of severe water scarcity alone can explain about 74 percent of the annual fluctuations in the global wheat price between 2000 and 2021. "These findings highlight the risks that climate change poses to global food security and the consequences of more frequent water shortages in agriculture," the researchers write in the study. Among the co-authors is Professor and Head of Institute Jørgen E. Olesen from the Department of Agroecology at Aarhus University. "We already know that climate change affects agricultural production. What is new here is that we can document a clear link between widespread drought around the world and the prices faced by consumers and food markets," he says in a press release. An important source of nutrition Wheat is cultivated over a larger area than both rice and maize, is a vital source of calories and protein, and is among the most internationally traded agricultural commodities. One of the central findings of the study is that wheat stands out from other water-dependent crops. The correlation between water scarcity and price turns out to be much stronger for wheat than for maize, while the researchers found no correlation for rice. Historical data show that about 5 percent of the world's wheat areas have been affected by severe water scarcity in an average year. However, this area has increased in line with climate change, and in particularly dry years such as 2000, 2010, 2012, and 2020, the proportion exceeded 15 percent. "Earlier studies have pointed out that international trade would play a key role in adapting to climate change. But the extent of severe water scarcity projected by this article, and the consequences for agricultural commodity prices, mean that a comprehensive transformation of the entire food system will be necessary if it is to continue providing affordable food in the coming decades," says co-author Petr Havlík, Program Director for Biodiversity and Natural Resources at the International Institute for Applied Systems Analysis in Austria. Prices rise with temperature The research team then used climate models to explore how development might look in the future. The study indicates that severe water scarcity will spread to larger parts of the world's wheat regions as temperatures rise. At around two degrees of global warming (compared to 1951-1980), the model estimates an average wheat price of about $273 per ton if agriculture does not adapt to the changing climate. At three degrees of warming, the figure rises to around $364 per ton, equivalent to about three times the inflation-adjusted global wheat price in 2010. "Wheat is one of the world's most important foods, and therefore climate-related production problems can quickly have global consequences. The study shows that we need to see drought as an international problem, not just as local events," says Jørgen E. Olesen. The researchers emphasize that drought alone does not determine wheat prices; energy and fertilizer prices, stocks, trade policies, and geopolitical conflicts also play a significant role.