Consumer Behavior Change

Ceres:
Water and Climate Risks Growing Threat to US Corn Production

Water and climate change risks are rising in the $67 billion U.S. corn sector, contributing to production and price volatility and growing concern by corn buyers that the nation’s largest crop needs to be grown more sustainably, according to a new Ceres report.

By Mike Hower | Published 10 years ago | About a 4 minute read

Water & Climate Risks Facing U.S. Corn Production: How Companies & Investors Can Cultivate Sustainability provides new data and interactive maps on wide-ranging threats to US corn production, including extreme weather events, groundwater depletion in regions with heavy irrigation demand, and contamination of waterways from inefficient fertilizer use.

Among other statistics, the report 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 run-off into the Gulf of Mexico’s “dead zone.”

In response to these risks, 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.

Among the key findings and recommendations in the report:

Groundwater Depletion and Irrigation Risks

Using GIS analysis, USDA and USGS data, as well as water stress maps from the World Resources Institute’s Aqueduct Water Risk Atlas, the report finds:

· Over half of the country’s irrigated corn production, worth nearly $9 billion annually, depends on groundwater from the over-exploited High Plains aquifer, which extends from South Dakota to Texas.

· 87 percent of irrigated corn is grown in regions with high or extremely high water stress, meaning there is limited additional water available for expansion of crop irrigation. Many of these same regions can also expect worsening water shortages due to climate change. Corn-growing areas in Nebraska, Kansas, California, Colorado and Texas are the most vulnerable.

Climate Change Risks

Despite a bumper U.S. harvest in 2013 and lower corn prices in 2014, many of the drivers of high corn prices, price volatility and overall risk are likely to worsen, in large part due to climate change. Severe droughts, floods and heat waves at key moments in the corn-growing season are becoming increasingly common, causing dramatic year-to-year supply shocks. Among the recent examples: record high corn prices in the wake of extreme flooding in spring 2011 and the prolonged drought in 2012.

According to the latest National Climate Assessment released in May, the negative effects of climate change on agricultural production in the Midwest and Great Plains will outweigh any positive effects. Corn plants are particularly sensitive to high temperatures (which can reduce pollination and grain count) as well as to drought. Higher temperatures and increased water stress mean that increased irrigation for corn will be required. Given limited water availability in many parts of the High Plains, a northward shift in corn acreage is predicted. More frequent and intense precipitation events in the Midwest are also expected to negatively affect farmers’ ability to plant and increase run-off and erosion.

Fertilizer Use and Nutrient Pollution

Corn is fertilizer-intensive and every year millions of tons of nitrogen and phosphate fertilizer leach into groundwater and run off cornfields into waterways. Corn fertilizer run-off is the single largest source of nitrogen pollution to the Gulf of Mexico’s hypoxic “dead zone,” an area the size of Connecticut that is devoid of aquatic life.

Mapping county-level USDA corn production data and data on nitrogen loading from the USGS, the report finds:

· Inefficient fertilizer use in 2013 cost growers $420 million from run-off into the Mississippi River, and eventually the Gulf of Mexico. (Nitrate pollution due to fertilizer use by agriculture also costs water utilities $1.7 billion a year according to the USDA.)

· 60 corn ethanol refineries with $8.8 billion in annual production capacity are sourcing corn from watersheds with high local nitrogen pollution from agriculture.

The report says 16 separate sectors from fast food companies to fertilizer 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 of Australia. A growing number of food and beverage companies and grocery retailers are increasing demand for more sustainable products, are setting public goals to source more sustainable ingredients, and are participating in new supply chain initiatives to help farmers address the risks profitably.

Speaking of corn, a team at the University of Nebraska's Department of Textiles, Merchandising and Fashion Design is developing textiles from corn husks. On a recent segment of QUEST, a multimedia series with a new focus on exploring the science of sustainability, the team explained the process as separating lignocellulose fibers (complex and woody biopolymers) from the husk and spinning it into yarn.

Mike Hower

Founder & Principal Consultant, Hower Impact

Mike Hower is the founder of Hower Impact — a boutique consultancy delivering best-in-class strategic communication advisory and support for corporate sustainability, ESG and climate tech.

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