The effects of El Nino on crop prices, production

The approaching Super El Nino has captured media attention, but its implications for farmers hinge on their geographic location. While farmers in the Northern Hemisphere may view it with indifference, those in export-driven nations like Australia could see higher crop prices as a result of warmer sea-surface temperatures in the central Pacific.

Bruce Burnett, a weather and markets analyst with Glacier Farm Media, notes that while not a primary driver of recent price increases, the Super El Nino could help sustain prices through the winter.

Recent provincial data from late July reveals a 16% increase in the price farmers could receive for wheat this fall, with canola prices up 26% and soybeans 17%. However, the prevailing factors influencing market prices are the state of crops in other producing regions, geopolitical tensions in the Middle East, and the Russia-Ukraine war.

Weather and markets analyst Darren Bond advises farmers to be mindful of their production costs to capitalize on short rallies that ensure profitability, rather than waiting for potential higher prices.

El Nino's impact extends beyond farmers, posing significant threats to food security in vulnerable regions. The World Food Program predicts that the powerful El Nino, forecast to peak between September and December, will push an additional 49 million people into acute food insecurity across Latin America, the Caribbean, Africa, Asia, and the Pacific.

This El Nino is expected to be the strongest on record, exacerbating food insecurity during a time when food systems are already strained by high energy and fertilizer prices, influenced by political pressures. The combined effect of climate shocks and existing pressures such as conflict could push more individuals into hunger, particularly in regions where farming is about subsistence rather than profit.