American Midwest Farming and Climate Change
3. The Good, the Bad and the Unknown? (Reading time: 15 mins)
In one of my previous posts, we looked at how the Mississippi river is a crucial part of the global food supply chain, and how climate change is making it more unpredictable and disruptive. After all, most customers dependent on the excess corn and soy produced in this region are outside North America. We did not address the more fundamental question of what happens to agricultural output production because of climate change. Global supply chains are important - but only if your farms produce enough to export.
Before we get into the nitty gritty, I’ll give you a brief primer on how economists analyze agricultural and farm outputs, no matter where on earth they are. There are two major aspects to consider:
Environmental Factors: Various crops react differently to weather and climate. Some prefer wet conditions, while others prefer dry. Some need a lot of sunshine, while some thrive in shade. This is the classic “what grows where” factor and is outside of human control, dictated by climate, soil-type and geography.
Human Intervention: While climate dictates what can be grown, doing it effectively needs human intervention. For instance, crops needs inputs such as irrigation (in the absence of reliable rainfall) and nutrition such as fertilizers, which makes the soil more nutritious for plants than it normally would be. They have to be protected from weeds and pests, which need human effort with chemicals to eliminate them. We can divide human intervention into two categories (a) Farm Inputs, which include the basic inputs for crops like water, pesticides, weedicides and fertilizers, (b) Scientific innovation, such as better seeds, genetically modified crops, and improved crop nutrition, which can lead to far more productive lands than what the environmental factors would normally allow.
This distinction is crucial to understand what makes modern agriculture so different from any other point in human history. In places where the environmental factor is naturally negative, i.e. not conducive to growing crops, human intervention is a matter of survival for the domestic population. Building canals, raising crops that need less water and can thrive in poor soils, are historical examples of humans surviving in dry, inhospitable climates.
If the environmental factor is naturally positive, agriculture is bliss. Just throw the seeds on the land and wait for rains. And profit (Ok, it’s not as simple as that and there is still hard work, but it’s rarely a fight for your survival). In these cases, human intervention acts as a bonus to increase yields - often several times more than what the domestic population needs. This is a more recent phenomenon in human history. Until even 200 years ago, the basic economics of supply and demand dictated that increased food production would reduce its price to unprofitable levels, because the local population can consume only so much. Transporting the produce safely over long distances was a technological challenge and expensive. As a result, such overproduction would typically end up in local grain silos as reserves, and often useful for rulers to expand their army for whatever campaign that suited their fancy. History is full of examples where food surpluses where the decisive factor in a king’s ability to invade their less fortunate neighbor. Aside from raiding and plundering, actual economic benefits to the farmers were minimal.
Thankfully, that is not how we do business today. Capitalism, globalization and cheap shipping technology ensure that agricultural overproduction beyond what your domestic population needs is still valuable, because farmers can export it for money. This makes them wealthier and the national economy more prosperous, creating higher standards of living by buying things they cannot normally access. There is an incentive to increase production as much as possible, even if the environmental factors are already in your favor. We rarely talk of modern capitalism and the age-old practice of farming in the same vein, but it absolutely has revolutionized how the world produces and consumes food today.
That brings us back to the original question of analyzing farm outputs. Human intervention as farm inputs, although necessary, quickly reaches the point of diminishing returns. For instance, there is a limit to how much you can irrigate your farms, beyond which it’s counterproductive because the plants can only take so much water. Ditto with fertilizers - while you can increase crop yields by adding more fertilizers, it is no silver bullet because there are several drawbacks. Producing fertilizers is energy intensive, has a large carbon footprint and buying them is not cheap. Plus, fertilizers require mining of non-renewable resources like phosphate that are not sustainable long term. Finally, fertilizers get washed away from the farms when it rains, into rivers and lakes and ruin their water quality as they are toxic. Therefore, increasing fertilizer use stops being environmentally and financially viable. We have already breached this limit worldwide, because of a larger population to feed.
For these reasons, increasing farm inputs is not a viable solution. Instead, smart money is on scientific innovation, as the upper bound is theoretically limitless. Agricultural scientists can custom-design crops fine-tuned for a lot of factors: pest resistance, drought resistant, faster growth period etc., to neutralize environmental negative factors. Therefore, farming can be more cheap, efficient and more reliable. Israel is a great example, as it has been growing water-hungry crops in the Negev desert and is a world leader in resource-limited agriculture. Science is doing what it does best — refusing to let geography and nature dictate our destiny without us having a say.
Therefore, economists sum up these two divergent types of human intervention in a fancy jargon, the Agricultural Total Factor Productivity (TFP). To quote its definition1, (emphasis mine)
The average rate of TFP growth measures the sector’s long-run ability to increase output without a corresponding increase in resource use.
All this says is that true, sustainable growth comes more from scientific innovation than the brute force approach of dumping more resources, such as fertilizer or water. Ideally, a well-managed farm should have high TFP without corresponding increase in farm inputs. Simple enough. The US farm output has had extremely high TFP over the decades because of intense scientific efforts, assisted by naturally positive environmental factors. It’s the agricultural equivalent of “talent meets hard work”. Yet, cracks are starting to show.
Agent of chaos: Climate change as the ultimate disruptor
I will now attempt to distill the current scientific opinions on what is in store for the Midwestern breadbasket, with the changing climate. But first, a word of caution.
Climate change affects only one of the two factors in agriculture - the environmental. While this is important, human intervention has pulled off so many previously unthinkable feats in agriculture that we can no longer consider climate as the absolute decider of our food supply. Still, scientific innovation in ten, twenty, or thirty years is unpredictable. After all, people watching the Apollo moon landings expected 2022 to have space taxis flying vacations to Mars. Considering it was 50 years ago, it was not an unreasonable expectation if you extrapolate from their reality. But instead of flying cars and nuclear fusion, we got TikTok and computers sucking electricity from coal plants to create invisible currency that the world isn’t even sure it needs. My point? Predicting the direction of technological innovation is hard. Too many factors - economic, geopolitical, demographic and cultural - play a role, which is difficult to grasp. It is therefore a wildcard and hence guaranteed forecasts are impossible.
After spending a lot of time reading, I can summarize climate change to bring three major changes to the Midwest:
Increased precipitation but extremely unpredictable. Climate change has made rains less frequent but more intense. This is not ideal, because we get floods during extreme rain events, followed by long dry spells and drought. We are already seeing many flood incidents and droughts in the same year.
Increased concentration of CO2 in the atmosphere Increased greenhouse gas emissions means dumping more carbon dioxide in the atmosphere. While this is not unique to the Midwest, we mention it because crops are highly sensitive to CO2 concentration.
Higher average temperatures across multiple seasons, leading to warmer summers and milder winters.
These three trends affect various crops differently, especially soy and corn, which has a massive overseas demand and dependence on the midwestern output. They also affect different regions of the geographic Midwest differently. For these reasons, calculating the precise impacts of climate change is not as clear-cut, and as we will see, a major roadblock. I can best describe the details as the Good, the Bad and the Unknown.
The Good
Photosynthesis is a biochemical respiration process in plants that converts light and CO2 into carbohydrates, i.e. energy. While it is the process by which plants keep themselves alive, it also actively traps carbon dioxide that will otherwise go into our atmosphere, and acts as a carbon sink. Which is why forests and trees are so important to mitigating climate change effects.
From an agricultural standpoint, having a higher concentration of CO2 in the atmosphere helps crops by speeding up photosynthesis. Another wonderful side-effect is plants need less water than usual, which is ideal in the era of more frequent droughts. As greenhouse emissions pump more CO2 into the air, it has the (fully unintended) fortunate consequence that our crops will grow faster and increase yields. The continued warming of our planet also means winters are becoming milder on average, while summers last longer. Another positive side-effect of this phenomenon is that the growing season becomes longer, and hence there is the opportunity to increase harvests in the same year.
Well, yay. So climate change = More food? Possibly. But I like to think of climate change as a broken clock. Sure, it’s sometimes right, but are you really going to rely on it to catch your flight?
The Bad
Higher average temperatures make winters milder and lengthen the growing season, but that is not necessarily good for the crops. In fact, the average minimum temperatures during the night and day have risen in the Midwest. While humans can’t easily feel it, even a 2-3 degree Fahrenheit (around 1-1.5 degree Celsius) increase in temperature stresses the crops. In the past, we have linked such temperature increases in years with significantly low yields for corn and soy. The problem is acute for corn, as it’s one of the world’s premier crops for human nutrition, and yet the most sensitive to temperature. Also, more CO2 concentration aids plant growth, but this will become counterproductive beyond the limit, which we will reach in a few decades.
Warmer seasons in areas with high precipitation like the Midwest also lead to extreme rainfall events which cause floods. A popular climate denial strategy is to mention that annual precipitation has changed little and therefore we can continue partying like its 1989. But this conceals a major problem: It’s not just about how much rain, but how many days it’s spread over. i.e. its frequency. 20 inches of rain, for an inch a day for 20 days, is a pleasant rainy-day drive to the coffee shop. But 20 inches raining down on you in 3 hours is the point where you pack your swimsuit to visit the parking lot.
For farmers, extreme rain means water-logging in soils. It is one of the worst things that can happen during planting season, because the soils which normally have tiny gaps and empty spaces filled with air are now full of water. This means that the plants that need to “breath” by absorbing oxygen from the soil through their roots will instead “drown”. Planting season for corn and soy is extremely time-sensitive, with usually a 30-day window in Spring, beyond which seasonal changes make planting unprofitable. Water-logging during this narrow window means fewer harvests for the entire season. In 2019, farmers left 20 million acres in the Midwest unplanted because of extreme weather. Where they planted the seeds, prolonged droughts caused by erratic precipitation made farming more challenging.
Increased rainfall and flooding also harms the long-term viability of farms. Fast moving water and runoffs erode the nutrient rich topsoil from the farms and wash them into the rivers. These top soils are the key ingredient that makes the Midwest so productive, and they have formed naturally over millions of years, while we lose them far more frequently every season. The result? The farms are becoming less fertile with each passing year, which forces farmers to apply more nutrition to the now-deficient soil. This brings us to fertilizers.
Fertilizers are wonderful as they act as a nutritional supplement for soils. But let’s think of the farmland as a person. Sure, protein shakes and vitamin tablets are helpful supplements, but I cannot (and should not) live off of them. There is no substitute to eating a balanced, naturally rich diet that has all the nutrients in the right form. Ignoring this in the short term may give me the six-pack abs I desire, but I better have my doctor on speed dial because it’s going to be downhill from here on. This analogy is a simplification to highlight the fact that intrinsic nutrition in the topsoil is the balanced diet our land needs. Its continued loss is irreplaceable, so farmers pump ever-increasing quantities of fertilizers into the land. While these increase yields in the short term, the land becomes less productive over the long term.
Finally, we have the problems of insects and pests which damage crops. Unlike tropical regions, which usually lose a chunk of their produce to pests, the Midwest has cold winters that kill the vast majority of pests. Come spring, the weather is favorable for crop planting and the lack of pests makes the task easier. With the warmer winters in the Midwest, this is no longer a guarantee, and there have already been many concerns from farmers who have to use more pesticides to protect their farms.
The Unknown
Things get interesting here, because the impacts can truly go either way, depending on how we manage it. It’s clear by now that precipitation is going to become erratic, and the Midwest seasons will get warmer on average. What does this mean? Lands that are historically too cold most of the year to grow crops become suddenly warmer, and hence more viable for agriculture. Lands that had mild weather suitable for cultivation are now too warm to grow some crops. We can see this in the Midwest - the cultivation areas have been slowly moving away from south to the north (towards the Canadian border), with the US states of North and South Dakota seeing a lot more farm activity. The crops themselves are changing. Since corn is the most sensitive to temperature fluctuations, farmers are already switching to soybeans since they are a bit more resistant.
But corn’s loss can be…. wheat’s gain?
Wheat is not as widely grown in the Midwest because the climate is not ideal. However, since it thrives in temperate climates, the warming of historically bone-cold regions is now “temperate” for wheat cultivation. Such geographic shifts in cultivable land lead to several unforeseen outcomes with changes in which crops farmers will plant, whose net effects can be hard to judge decades in advance.
To understand this, a NASA study ran massive simulations of global agricultural output scenarios on its supercomputers, and found that wheat yields increased somewhat, but corn dropped by almost 20%. The United States Dept. of Agriculture (USDA) has similarly bleak assessments for both corn and soy. Yet, not all hope is lost. Just as scientific innovation has made us produce more than what nature originally intended us to, scientists argue that another massive scientific revolution is necessary to counteract losses from climate disasters, because we are reaching the limits of what we can do with our current capabilities.
This is the area I am most optimistic about, since the Midwest agricultural output currently is as much a product of science as nature’s bounty. And the biotechnology sector is actively involved. A cool example: New seeds for corn and wheat are already on the market which produce nitrogen internally, by fusing microbes which produce ammonia, inside the seeds. This game changing technology means farmers have to depend less on fertilizers and have more control over the plant growth. This example is merely one of the many, where science can help keep our food production on track despite climate change acting as an agent of chaos.
Conclusion and Outlook:
I can sum up this section in a single, possibly counter-intuitive statement:
Things are going to look better before they get worse.
If this makes little sense, below is a quote from a recent Forbes article about Midwest farmers struggling with climate change in 2022 (emphasis mine)
Extreme weather and high fuel prices have been daunting obstacles for American food producers, but the good news is wheat and soy yields are up compared with last year.
The rest of the article describes all the nightmare scenarios farmers are facing with drought, lack of water for irrigation and uncertainty over planting seasons. But somehow, somehow, yields are up, thanks largely to technological innovation and the rare positive effects of climate change. Yet, the farmers worry because they are hitting the upper limits of how much they can innovate with current technology, with a climate that refuses to cooperate.
Lest we forget, farming is a business venture. Farmers choose to work hard on the farms so that they can turn a profit. While farming has always been an enterprise at the mercy of nature, climate change has brought an element of uncertainty that no farmer currently alive has seen.
This brings us to the economic effects of climate change: As it gets more uncertain to make a living from crop harvests, many farmers may just leave their lands unplanted. After all, it takes a major investment to buy seeds, fertilizers, machinery to plant the land.
Therefore, government provided crop insurance exists in the US (and several countries) to cushion farmers from such risks and encourage them to keep the world food secure. Unfortunately, because of climate change, the insurance payouts are increasing every year. Farmers make far more money selling their produce, and insurance is not enough to make a living.
This leads to a double whammy: More costs to the government for insurance (hence the taxpayer) and lesser output as more farmers give up fighting with nature. Therefore, even though climate change is a primary hit on the Midwest agricultural output, its resulting bad economics is a secondary hit that is no less significant. Food will become more expensive, adding to financial pressure already faced by low-income families. In fact, the National Climate Assessment predicts that Midwest temperatures will warm to the point where certain crops may not be profitable.
In a recent USDA survey, most farmers said they would hesitate to change their farming practices despite climate threats, because a prediction of the impacts - the “how”, the “what”, the “where” - are scientifically not clear enough to risk the change. Everyone agrees climate change is coming for them, but no one is sure if it’s worth changing their practices. I mentioned that science is our only bet, but scientific innovation at this scale takes several years, if not decades, and is neither cheap nor quick. And as the COVID-19 vaccine race showed, - spread of science isn’t equitable either, as companies with attractive technology will be unlikely to part with it to poorer nations. Yet, agriculture is the bedrock of globalization, because every nation today relies on some form of uninterrupted food imports to keep its population fed. Fair distribution of innovative agricultural technology would be crucial to ensuring any semblance of normalcy in a world where climate change wrecks food supply chains. To be honest, this is the part I am the least optimistic about. Science is hard, but achievable. But a solution to corporate greed? We haven’t figured that one out yet.
But… more to the present. The moral of this story is that corn and soy arising out of the Midwest - which is a significant chunk of the global production - are under severe stress at both the production side (agriculture) and supply chain side (Mississippi river shipping). The world will feel the aftershocks, particularly China, the world’s largest consumer of these commodities.
There is more to this, and we haven’t talked about Russia’s crucial role yet. To get there, I will now conclude the American part of this story. In a future post, I will present another massive agricultural region whose outlook looks both promising and horrifying at the same time.
Hola, South America.
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Growing climatic sensitivity of U.S. agriculture linked to technological change and regional specialization, Science Advances, 12 Dec 2018, Vol 4, Issue 12
This article was extremely interesting and yet light, I really enjoy your writing style and I really appreciate the fact that you took the time to analyse the data and display its meaning instead of leaving that to me. Great job!