Climate Change Main Contributor to Volatility of Corn Prices
The impact of climate change on corn-price volatility outweighs movements caused by energy market policies and oil prices, according to research published in the journal Nature Climate Change.
“U.S. corn-price volatility exhibits higher sensitivity to near-term climate change than to energy policy influences or agriculture-energy market integration,” researchers Noah S. Diffenbaugh, Thomas W. Hertel, Martin Scherer and Monika Verma wrote, adding that the presence of a biofuels mandate enhances sensitivity to climate change by more than 50 percent. “The likelihood of increasing occurrence of severe hot events in response to increasing global greenhouse-gas concentrations poses a particular risk for field crops,” boosting yield variability and price volatility, the researchers said. While volatility will be damped by closer integration of the corn and energy markets, it increases exposure to oil price uncertainty and the influence of biofuel mandates, they said.