top of page

Climate change is devastating Brazil’s agricultural industry — and hitting food prices worldwide

In late July the cost of Arabica coffee beans jumped 30% over a six-day period. Orange juice prices popped by 20% over a three week stretch. In August, the cost of sugar hit a four-year high.

Burning deforestation of the Brazilian Caatinga biome in Barro, Ceara, Brazil on December 21, 2020. Image Credit: Shutterstock

Behind these surging prices is one culprit. Climate change. More specifically, climate change and its impact on the agricultural industry in Brazil.

Brazil’s farmlands on the Atlantic coast are responsible for supplying four-fifths of the world’s orange juice, half of its sugar, a third of its coffee, soy and corn — and they’re all under extreme climate stresses, as Bloomberg News reported.

The price spikes that resulted from the freeze and drought that hit Brazil this year have had a ripple effect on food prices around the world. The UN Food Price Index is up 31% over last year.

Cereals have been hard hit globally, according to the UN. Reduced harvest expectations in several major exporting countries pushed up world wheat prices 43.5% above their level of one year ago, the UN said.

Other necessary commodity grains aren’t doing much better. Lower barley production outlooks, especially in Canada and the United States of America, and spillover from rising wheat prices pushed up international barley values to 35.6% above their levels a year ago.

“It’s a vicious cycle,” Marcelo Seluchi, a meteorologist at Brazil’s Natural Disaster Monitoring and Alert Center, told Bloomberg. “There is no rain because there is no humidity, and there is no humidity because there is no rain.”

Seluchi estimates that Brazil hasn’t had a normal rainy season in over a decade — and the culprit is deforestation and climate change.

The problem isn’t confined to Brazil. Extreme climate events in the US and around the world in other major agricultural producing regions are going to have a significant impact on food supply.

Citing the Journal of Environmental Economics and Management, Bloomberg reported that there’s an expected 10% decline in crop yields coming over the next three decades, a period in which the global population is expected to grow more than one-fifth.

That’s one of the reasons why investments in new agricultural technology companies are soaring. Robotic farming equipment, new fertilization techniques, and indoor agriculture companies have raised billions of dollars in the past few years — all to shore up a food supply that’s under increasing climate pressure.

One company that’s addressing the crisis is FootPrint Coalition’s own ClimateAI, which has developed predictive tools to monitor how climate events will effect agricultural supply chains six months to a year out. The technology can help consumer food companies better plan for droughts, flooding, fires, and other disasters.

“We’ve reached an inflection point on climate adaptation, and there’s a growing sense of urgency around preparing supply chains to quickly adapt to the impact of climate change. The pandemic — timed with the hottest year to date — put the focus squarely on the vulnerabilities of our food system infrastructure and supply chains,” Himanshu Gupta, the CEO of ClimateAI, told the publication AgFunder earlier this year. “ClimateAi is already helping major players across the agrifood supply chain better understand, manage and communicate climate risk to improve transparency and increase profitability.”

bottom of page