Climate change looks set to intensify weather extremes

August 25, 2020

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rought can be devastating. The evidence is compelling and not hard to find. The protracted drought that hit Australia at the turn of the century slashed cotton production by over 50%. To help farmers and small businesses survive, the government issued a staggering AUD 4.5 billion in emergency aid. In 2017, drought swept through northeast Nigeria, Somalia and Yemen, resulting in a famine that affected 20 million people. Only a huge international aid effort averted a humanitarian disaster. In 2020, extreme drought conditions have hit Central and Northern Europe. In France, wheat and barley crops are failing due to the driest soil conditions in five years, while grain producing countries Romania and Ukraine have seen their water reserves reach critical levels.

In future, droughts are expected to occur more often and with greater severity, making an even more dramatic impact on agriculture. In a recent article in Geophysical Research Letters, Ukkola et al. (2020) studied the trends in drought risk and found that several key agricultural regions in the Amazon, the Mediterranean and southern Africa can expect more frequent and more intense drought events. Other regions, such as Central Europe and the northern forest zone, are expected to become wetter on average, but the droughts that do occur in these regions will become more extreme. The increasing climate risk now poses a serious threat to agricultural production, water availability, food security and economic growth in many countries.

Price volatility in agribusiness

The resulting price volatility is a major concern for the agrifood industry. The UN Food and Agriculture Organisation reports that global price volatility in agricultural products has been increasing since 2005 and is likely to remain a major concern for decades to come. Governments have intervened in the market, supporting farmers directly to shore up their income in the face of fluctuating conditions. Commodity traders employ volatility models to estimate future price variations and secure their investments. One factor driving the price volatility of agricultural products is crop yield. Being able to measure and forecast variations in crop yield is therefore critical to managing price risks and creating a safe policy environment.

VanderSat’s role in assessing long-term climate risk

As entrepreneurs, farmers need to develop an investment strategy, which may involve decisions about crop types or whether to invest in costly drainage or irrigation systems. VanderSat’s historical data record can help them reconstruct several decades of hydrological conditions, providing a wider context for a particular stretch of farmland in relation to the local climate. This will allow ‘what-if’ scenarios to be run when taking specific decisions, with a view to determining expected crop yield. In short, VanderSat can help you construct a climatological framework to calculate your return on investment.

Data gives you an edge in commodity trading

VanderSat data services enable you to monitor the condition and growth of crops across the globe. In many developing countries, the lack of in situ gauge data makes remote sensing data the only source of information on crop conditions. VanderSat’s daily coverage and consistent signalling of satellite-based soil moisture, vegetation optical depth and temperature maps provide an accurate assessment of the conditions essential to agriculture production. According to one study, the use of VanderSat’s remote sensing data enabled soybean production in the US between 2002 and 2018 to be predicted two and a half months before harvest with an accuracy of over 80%.

VanderSat’s daily satellite observations, combined with a long-term and consistent historical dataset dating back to 2002, are used to gain an understanding of the optimal conditions for crop growth and the extent of production loss due to adverse conditions. By focusing on powerful parameters for crop production and combining daily input with historical data, we can help analysts and traders around the world make better crop production estimates and improve their commodity trading strategy. Our near real-time data not only reduces costs, but also provides unique business opportunities.

Satellite information on soil moisture in critical production areas can give you the competitive edge you’ve been looking for.

This article is written by:

Please let me know your thoughts!

Arjen Bakker
Head of Agri, Food & Commoditiesabakker@vandersat.com

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