AARHUS, DENMARK — A recent study examining the effects of drought on wheat prices found that the relationship between water scarcity and price proved to be far stronger for wheat than for maize, with 3 degrees of global warming potentially leading to a tripling of average wheat prices compared with 2010 levels.

The study, authored by researchers from Aarhus University in Denmark, combined climate data, crop production areas and global commodity prices to investigate how drought affects wheat markets worldwide. They found that severe water scarcity alone can explain around 74% of annual fluctuations in global wheat prices between 2000 and 2021.

Jørgen E. Olesen, professor and head of the Department of Agroecology at Aarhus University, noted that when water shortages hit several of the world’s most important wheat-growing regions simultaneously, the consequences can be felt all the way to supermarket shelves and bakery aisles.

“We already know that climate change affects agricultural production,” Olesen said. “What is new here is that we can document a clear link between widespread drought across the globe and the prices faced by consumers and food markets.”

The researchers developed a new indicator known as Severe Water Scarcity. It measures the proportion of global cropland experiencing drought during the months when crops are most sensitive to water shortages. Rather than focusing solely on local drought conditions, the approach examines what happens when several major agricultural regions are affected simultaneously or in quick succession. These compound drought events are expected to become more common in a warmer climate, the study noted.

Historical data show that, on average, around 5% of the world’s wheat-growing area has experienced severe water scarcity in any given year. However, this share has increased alongside climate change, and in particularly dry years such as 2000, 2010, 2012 and 2020, it exceeded 15%.

The research team then used climate models to explore how this trend may develop in the future. The study suggested that severe water scarcity will spread across larger portions of the world’s wheat-growing regions as temperatures continue to rise. At around 2 degrees of global warming, the model estimates an average wheat price of approximately $273 per tonne. At 3 degrees of warming, that figure rises to about $364 per tonne, roughly three times the inflation-adjusted global wheat price recorded in 2010.

“Wheat is one of the world’s most important food crops, which means climate-related production problems can quickly have global consequences,” Olesen said. “This study shows that we need to view drought as an international challenge rather than a series of isolated local events.”

The researchers emphasized that drought is not the only factor influencing wheat prices. Energy and fertilizer costs, grain stocks, trade policies and geopolitical conflicts also play important roles. However, it identified a climate-driven factor that previously has been difficult to quantify, and which already appears to be influencing global markets.

The study suggests that future assessments of food security should not focus solely on gradual changes in crop yields; they should also account for major and recurring drought events that affect multiple key production regions simultaneously or within short periods of time.

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Arvin Donley is editor of World Grain. He has been at Sosland Publishing Company since 2005, covering the grain, milling and feed industries. He is a 1989 graduate of the William Allen White School of Journalism and Mass Communications at the University of Kansas.

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