There are few things that we can know with certainty about the future of food, but that prices will be higher next year than this year is a given. Later this year, I’ll be giving a talk at the Cambridge Conservation Institute on The Great Food Crisis of 2027. In this series of posts, I’ll be sharing some of the data that’ll inform that talk, and noodle through some of the scenarios and strategies to mitigate them.
First up, let’s set the stage. Bloomberg’s commodities desk points to the first tremors of food price inflation.
That’s before El Niño has really sunk its teeth into the harvest season. NOAA helps explain when and where that’ll happen, but the basics are these:
All of this will unsettle food markets. The European Central Bank pondered the effect of El Niño back in 2023, and modelled that there’d be a price bump for a strong El Niño looking like this:
We know that the forthcoming El Niño is likely to be very strong indeed. Other things being equal, the older analysis is likely to underestimate the volatility of these price swings, if nothing else.
Now let’s add what’s different this year. We know that shipments of fertilizer through the Persian gulf are down significantly, according to the WTO data lab.
Other farm inputs aren’t cheap either, with oil and feedstocks stressed both by the Iran war and by high temperatures this year, as the World Bank has spotted.
All of which means that the European Central Bank projections are likely underestimates for 2027. When it comes to next year, there is one official estimate available. The USDA has these forecasts:
What of the rest of the world in 2027? I’ll be digging into this more over the coming months, but here’s some recent FAO data tracking not prices but stocks over the coming year. Already, the rice situation isn’t looking great, and it’s the world’s most consumed cereal.
And looking further out, here’s some sobering analysis from Maximilian Kotz and colleagues, again via Bloomberg.
Looking forward to seeing you in Cambridge in early December, Raj!