‘Heatflation’ Could Push Up Food Prices

Scorching Summers

The world of agriculture pays a lot of attention to the weather. It makes sense, you need sun and rain for crops to grow, but extreme weather can be a problem.

That’s why cacao and coffee prices are high, for example. Extreme heat is also impacting the yields of a variety of fruits and vegetables, CNN reports — a phenomenon some are calling “heatflation”.

Extreme Effects

Intense heat can cause certain fruits and vegetables to shrivel, limiting harvests. In particular, corn yields, a key staple crop, could fall by as much as 10 percent by 2050 thanks to intense heat, according to Atlantic Council data.

Smaller crop yields mean less supply, so it often leads farmers to raise prices to sustain revenue. Additionally, the heat can force farmers to incur other costs like improved irrigation systems or sun protection for their produce. Workers may also be hesitant to take on heat-related health risks from harvesting in high temperatures, which can result in labor shortages.

What Next?

Wholesalers and grocery chains typically have contracts in place that lock in prices, so your summer shopping costs are unlikely to skyrocket. However, more extreme weather could mean that consumers may need to prepare for higher produce prices over the longer term.

Heatflation could drive up inflation, pushing up food prices globally by up to 3 percentage points per year over the next decade or so, and by about 2 percentage points in North America, per a paper published in Nature.

The agriculture industry may need to invest in new technologies to protect crops from heat, including moving production indoors, where farmers can control factors like temperature, rainfall, and humidity.

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