New research: Climate change could triple the price of wheat

Bread, pasta and breakfast cereals may seem far removed from dry fields in North America, Europe or Asia. Yet when water shortages hit several of the world's most important wheat-growing regions simultaneously, the consequences can be felt all the way to supermarket shelves and bakery aisles.

This is the conclusion of a new international study published in the journal Earth's Future. Researchers combined climate data, crop production areas and global commodity prices to investigate how drought affects wheat markets worldwide. The findings are striking: the extent of severe water scarcity alone can explain around 74 percent of annual fluctuations in global wheat prices between 2000 and 2021.

Among the co-authors is Professor and Head of Department 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 across the globe and the prices faced by consumers and food markets," he says.

The researchers developed a new indicator known as Severe Water Scarcity (SWS). It measures the proportion of global cropland experiencing drought during the months when crops are most sensitive to water shortages.

Rather than focusing solely on local drought conditions, the approach examines what happens when several major agricultural regions are affected simultaneously or in quick succession. These compound drought events are expected to become more common in a warmer climate.

One of the study's key findings is that wheat stands out from other crops. The relationship between water scarcity and price proved to be far stronger for wheat than for maize, while researchers found no comparable relationship for rice.

Historical data show that, on average, around five percent of the world's wheat-growing area has experienced severe water scarcity in any given year. However, this share has increased alongside climate change, and in particularly dry years such as 2000, 2010, 2012 and 2020, it exceeded 15 percent.

The research team then used climate models to explore how this trend may develop in the future. The study suggests that severe water scarcity will spread across larger portions of the world's wheat-growing regions as temperatures continue to rise.

At around two degrees of global warming, the model estimates an average wheat price of approximately USD 273 per tonne. At three degrees of warming, that figure rises to about USD 364 per tonne, roughly 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.

The researchers emphasise that drought is not the only factor influencing wheat prices. Energy and fertiliser costs, grain stocks, trade policies and geopolitical conflicts also play important roles. However, the study identifies a climate-driven factor that has previously been difficult to quantify and which already appears to be influencing global markets. That makes the findings relevant far beyond agriculture.

Wheat is one of the world's most important food crops and a staple food for billions of people. When drought affects several major production regions at the same time, the impact can ripple through international markets and affect countries and households far from the places where rainfall failed to arrive.

The study therefore suggests that future assessments of food security should not focus solely on gradual changes in crop yields. They should also account for major and recurring drought events that affect multiple key production regions simultaneously or within short periods of time.