America’s $67 Billion Corn Industry Is At Risk

Posted by on June 18, 2014 in Green

Scorched_corn_fields_near_Jonesville,_LA_IMG_1176Water and climate change risks are severely threatening the $67 billion U.S. corn sector, which is contributing to production and price volatility. This is in spite of a bumper U.S. harvest in 2013 and lower corn prices in 2014. Many of the drivers of high corn prices, price instability and overall threats are set to increase, in large part due to climate change. Severe droughts, floods and heat waves at key moments in the corn-growing season are becoming common, causing dramatic year-to-year supply shocks. The latest report by Ceres, a not-for-profit sustainability advocacy group that works with companies and investors, highlights these threats, along with growing concern by corn buyers that the nation’s largest crop needs to be grown more sustainably. This detailed Ceres report provides new data and interactive maps on wide-ranging threats to U.S. corn production, including extreme weather events, groundwater depletion in regions with heavy irrigation demand, and contamination of waterways from inefficient fertiliser use. Among other statistics, the research finds that 87 percent of irrigated corn production is grown in water-stressed regions, and that corn growers in the Mississippi River Basin lost nearly half a billion dollars-worth of fertilizer in 2013 due to agricultural runoff into the Gulf of Mexico’s “dead zone.”

Escalating corn production for America’s food, livestock and energy industries has put the corn sector on an unsustainable path. The Ceres’ report finds that 16 separate sectors in the States from fast food companies to fertiliser manufacturers to grocery retailers depend on U.S. corn as a key ingredient for their products, or as a market for their inputs and services. In 2013, the top 45 companies in the corn value chain earned $1.7 trillion in revenue, which is more than the annual GDP (gross domestic product) of Australia!

It’s clear that corn buyers have an important role in recognising this challenge and it’s encouraging that some are already trying to influence agricultural practices. A growing number of food and retail companies that rely on corn are developing supply chain initiatives to encourage more resilient and sustainable agricultural production in the sector, which has nearly doubled in size in the past two decades. However, more action is required and many companies that depend on U.S. corn are not taking steps to help find a solution. The Ceres report recommends how corn-buying companies and their investors can incentivise farmers to reduce risks, enhance yields and protect water resources.

Ultimately, a critical factor for improving the environmental performance of production agriculture is to get the individuals managing the land—that’s the farmers themselves—to see that environmental stewardship enhances profitability and is crucial to the long-term viability of modern agriculture.

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