The term “argicultural commodities” has been thrown around quite a bit recently as an explanation of the recent problems in the United States with their agriculture industry. Some analysts have claimed that the problems are due to climate change and global warming, others have attributed it to the depletion of the once all-natural wheat supply in the United States, or simply called it a case of over-valuing commodities in the American market. The reality is that whatever the cause of the problems in agriculture, the fact remains that this is a very sensitive sector of the overall economy and a decline in commodity prices could do serious damage to the American economy. How can agricultural commodities be a cause of climate change and agriculture futures?
First off, let’s talk about the subject of climate change and agriculture. Climate change is described as a change in the earth’s temperature, characterized by increases in extreme temperatures and decreases in normal temperatures. One of the most obvious effects of climate change is increasing temperatures, which impact virtually every aspect of agriculture. From the type of crops that can grow to the amount of water that must be used to grow them, everything will be affected by climate change. Temperature increase, coupled with severe drought, will have serious consequences for the agricultural industry, affecting the market, profits, and ultimately the very existence of agriculture.
The second effect of climate change is the changing of the face of agriculture. Wheat and corn prices have increased dramatically, forcing farmers to get creative in their decision making. One very obvious problem is the fact that corn production is centered around the hot and dry regions of the United States, such as the South and the west. Other areas, such as Australia, will experience some of the same problems, but the conditions there will be much different due to their geographic location.
Because of the combination of heat and drought, crop production has decreased in some areas. This reduction in crop production has led to less revenue for the farmers. When crop prices rise, so does the price of agricultural goods. The increased cost means that farmers have to get creative when it comes to the variety of crops they plant and the types of livestock that they use. The combination of these factors means that the quality of the crop has to be improved.
Some of the most traditional crops that we use every day are threatened with climate change. One of the easiest to recognize, and least expensive to replace, are the cotton crops. Although some other types of crops might not be affected quite yet, think about the possibilities. Some analysts believe that the world’s biggest crop producer, the United States, could be hard pressed to replace some of its most popular cereals due to rising prices.
Argicultural commodities are a perfect example of how the world’s agricultural base can be badly affected by climate change. Some of the most important legumes, like the staple of beans and lima beans, might be wiped out completely. Other crops like wheat and corn might survive, but in smaller quantities. But the combination of planting crops that are sensitive to climate change and the increase in prices for those crops means that growing them is a more attractive proposition for many farmers.