The planet has officially entered an historic drought. That’s according to climate experts at Everstream Analytics, who go on to say that parts of Europe and the US are now considered particularly high risk and classified “hotspots”.
“As we transition from winter to spring in the Northern Hemisphere and summer to autumn in the Southern Hemisphere, there are numerous areas that have evolved into severe drought,” says Jon Davis, chief meteorologist at Everstream Analytics.
Food security and commodity costs
The growing threat is placing food security in serious jeopardy, as climate-sensitive crops like corn, cocoa, coffee and sugar struggle to survive. And with the rising threat to commodities comes rising costs to manufacturers and consumers.
Among crops seeing the sharpest price increases is sugar. The highly sought-after commodity hit a 13-year high in 2024 leaving manufacturers scrambling to adjust. And this is only going to get worse as conditions continue to deteriorate.
“Shifting weather patterns and extended periods of drought will have a significant impact on sugarcane production,” says Mike Ogg, regional head, Africa and the Middle East at Bonsucro. “As a water-intensive crop, sugarcane growth will be affected by drought conditions caused by variable and unreliable rainfall and limited availability of water for irrigation.”
This will be cause for serious concern to manufacturers who rely on sugar. Particularly as many had previously shifted to sugarcane to safeguard against losses on the more volatile sugar beet.
Similarly, drought conditions in West Africa and other major growing regions has led to cocoa shortages, forcing prices to hit a record high and manufacturers like Mondelēz to adjust down their projected profits. Though it was reported the confectionery giant would rebound.
Meanwhile, stocks of essential food crop corn, are falling and could reach critical levels if growing conditions don’t improve. However, experts aren’t hopeful this will be the case and are projecting drought conditions to continue as the year progresses, impacting the upcoming growing season.
“Planting of the summer crops is just starting,” says Everstream Analytics’ Davis. “The soil moisture deficit is not a problem now, but it will quickly become one unless abundant rains develop this spring in the driest areas. As crop moisture demands increase later in the spring, this will be a critical area to monitor.”
Furthermore, many aren’t aware of the impending threat, as flooding has led to the belief the world couldn’t possibly be experiencing drought.
Floods disguising droughts
Global food and beverage supply chains have been hit hard by flooding over the past five years, leading to the destruction of crops and loss of grazing land.
“Major events have occurred in every continent and caused severe damage,” says Everstream Analytics’ Davis.
This has led many to underestimate the severity of the threat of drought, believing one can not exist at the same time as the other.
However, the coining of the terms ’heatflation’ and ’sogflation’ in the same year prove this not to be the case.
“Weather conditions are changing at varying rates depending on the region, with some regions experiencing increased temperatures, altered rainfall patterns and drought,” says Bonsucro’s Ogg.
What does this mean for food and beverage?
The food and beverage industry has focussed heavily on shoring up supply chains as changing weather patterns have increasingly threatened food supplies. However, the recent escalation of severe climate-related weather events and spikes in commodity prices will likely accelerate this process.
And there is a chance to turn things around as Bonsucro’s Ogg explains.
“By implementing context-specific agricultural practices, farmers can mitigate and adapt against climate change and future-proof them the best they can to secure their livelihoods and avoid the worst-case scenario that is predicted via the climate resilience modelling.”
