WEATHER SHOCKS AND INTER-HEMISPHERIC SUPPLY RESPONSES: IMPLICATIONS FOR CLIMATE CHANGE EFFECTS ON GLOBAL FOOD MARKETS

Climate models predict more weather extremes in the coming decades. Weather shocks can directly reduce crop production, but their effect on food markets is partly buffered by storage and supply responses that can be complex and nuanced. We explore how inter-hemispheric trade and supply responses can moderate the effects of weather shocks on global food supply by enabling potential intra-annual arbitrage. Our estimates of this effect in the case of wheat and soybeans suggest that it may be considerable: 25–50% of crop production lost to a shock in the Southern Hemisphere is offset six months later by increased production in the North. These results have implications for the potential effects of climate change on global food markets, for how we model these interactions and, possibly, for the design of trade and production-related policies that aim to leverage this inter-hemispheric buffer more effectively.