Yves here. Those of you who remember the financial crisis will see striking parallels between the systemic risks then and the structural/design factors that look set to increase the severity of the coming food crisis. Author Ekamjot Dhillon correctly focuses on the role of breadbasket areas, as in major grain producers. Just the way no one thought it was possible for residential real estate prices to fall all over the US, as opposed to regionally, so too does no one seem prepared for big shortfalls in multiple key grain supply sources. And again like the crisis, this foundational food supply system suffers from excess optimization (too much efficiency leads to fragility) and integration (which results in crises that are not compartmentalized but can propagate quickly and broadly).
By Ekamjot Dhillon, Phd Student, Global Governance, Balsillie School of International Affairs. Originally published at The Conversation
Agriculture today is a massive, globally interconnected industry. That interconnectivity has brought jobs and varied foods to people who might not otherwise be able to access them.
However, like many other industries today, agriculture is dependent on a small number of key regions that support a vast network.
What made the modern food system seem resilient was never abundance alone. It was geography. Regions like the North American Prairies, Ukrainian Steppe and northern India grow much of the crops that feed humans and livestock.
The system works because crop failures are expected to be local, not simultaneous. If one breadbasket region fails to produce one year, another could cover the shortfall. The Earth itself provides a kind of buffer, but that buffer is thinning.
Multiple breadbasket failures are becoming more likely as climate change increases the chance of simultaneous stress across major producing regions. The danger is no longer only a bad harvest in one place. It is the possibility that several of the regions the world depends on for staple crops could come under pressure at once.
My PhD research focuses on how climate stress reshapes agricultural risk and food-systems. This perspective is important because climate shocks do not affect farms in isolation; they move through markets, supply chains and affect global food prices. In that sense, a drought is not only an environmental problem, but also a structural risk for the global food system.
The Weakening Breadbasket Buffer
Drought is one of the clearest ways climate change is weakening the breadbasket system. Major crop-producing regions depend on predictable rainfall, stable soil moisture and reliable growing seasons. When one region experiences drought, other regions can sometimes compensate for the shortfall. But when several breadbasket regions dry out at the same time, the system has fewer alternatives.
A recent study on global breadbasket droughts found that the chance of simultaneous droughts across maize-producing regions this century are between 52 to 60 per cent depending on the scale of greenhouse gas emissions. The authors show that this risk is driven especially by long-term drying in Brazil, Europe and the United States, and that global shocks can emerge even when several regions experience only moderately extreme droughts at the same time.
The danger is not only that climate change is reducing yields. It is that it undermines the geographic logic on which the modern food system depends. Global trade works best when shocks are scattered. It works far less well when the places that are supposed to balance one another are all under pressure at once. What looks like a resilient system under isolated stress can become a brittle one under synchronized stress. Interconnectivity, in other words, can become its own form of risk.
The evolving fragility of the global food system suggests that, as trade networks deepen and more countries rely on imports, shocks do not simply pass through the system. They can intensify inside it. A harvest failure in one region can trigger export restrictions, precautionary buying and wider instability elsewhere.
The “evolving” part refers to how the system has become more densely interconnected over time. A trade connection is an import-export link between countries, such as one country supplying wheat or rice to another. As these links multiply, shocks have more pathways to spread.
During times of food scarcity, food producers will tend to reduce exports. In other words, when food becomes scarce, the same trade links that normally move grain efficiently can become channels for disruption, as countries protect their own supplies and import-dependent countries are left more exposed.
That matters because food systems are not just farms; they also include the manufacturing and distribution of seeds, animal feed, fertilizers and pest control, along with storage, transport, processing and retail.
Events like droughts are not just a production shock. They can be a whole supply chain shock. And the more a system relies on tightly timed, low-inventory supply, the more exposed it becomes when the weather stops behaving predictably.
Dangers of Corporate Consolidation
Modern agriculture does not simply rely on favourable climate conditions. It also relies on a continuous, co-ordinated flow of manufactured inputs arriving in the right place at the right time and at the right price.
That flow is not organized through a wide-open marketplace with endless alternatives waiting in reserve. It moves through highly concentrated corporate channels.
Corporate concentration and power in food systems shape choice, flexibility and control. Global agriculture’s top four firms account for roughly 50 to 60 per cent of the commercial seed market, and those same four control around 70 per cent of the global pesticide market.
Mergers between seed and agrochemical firms, and consolidation in fertilizer and retail, only deepen that pattern.
In stable times, this can look like strength. Large firms can move enormous volumes of seed and chemicals, co-ordinate supply across borders, standardize products and cut transaction costs. Producing at large scales can make the system faster, cheaper and more legible. However, scale is not the same thing as resilience.
Fewer, more dominant suppliers mean fewer alternatives. When a smaller number of firms control seed, pesticide and fertilizer markets, more of the system depends on fewer decisions and routes.
In a concentrated system, disruption does not stay isolated. It ripples outward across a larger share of the food chain. The vulnerability is not only scarcity, but co-ordination: when several pressures arrive at once, a concentrated system has far less ability to adjust.
A Drought Elsewhere Can Empty Shelves Here
International food supply shocks show that one country does not need to experience drought itself to suffer the consequences. If one country or region depends heavily on imported staples, a harvest shock thousands of kilometres away can raise prices, tighten supply and limit access to food.
When it comes to poorer communities, even a modest external shock can quickly become a crisis. The modern food system was built on the expectation that geography would keep climate risk uneven.
As long as shocks remained scattered, dependence on a few key suppliers seemed workable. The system did not need much slack because it assumed someone, somewhere, would still be producing.
Now the climate is testing all of that at once.
The other potential problem might be that the diversity of crops, as part of commodification, seems to have fallen. (I don’t know if this is verifiably true.) While barley gained bad reputation as poor people’s food in East Asia, for example, the origin of that reputation was that, relatively speaking, there was a lot of barley relative to rice. If the rice crop failed, there was a good deal of barley that could take its place. As agricultural practice changed, rice production increased, it is true, both absolutely and relatively, but barley production fell. One imagines this was both the consequence of greater specialization (better to focus on one crop to increase overall yield) and continued aversion to barley in East Asia–if you are better off, why would you eat poor people’s food, and if there is no market, why would farmers plant barley? So, I’d imagine that the risk of food shortage conditional on rice failing actually grew even as crop yields were rising absolutely.
I wonder if something similar is going on globally. If there is a big shock to the supply of wheat and rice (whatever happens to be the most popular cultivars, more specifically), what and how much is there to take their place? If there’s no more wheat, say, how much rye is there? (supposedly, rye production fell dramatically since 1990s, but I wonder about longer term trends historically)
here in nw texas hill country, we used to be peanut country(subsidies went away in clintons farm bill)…and all those guys would plant winter wheat for wintertime, for forage for the cows and then harvest the wheat in spring.
this continued after peanuts were gone for a few years. (i’d find 2 50# sacks on my porch every spring from my neighbor). this ended when even more big ag consolidation meant that there was only one buyer for wheat(i dont remember the details, corpse names etc)…and that corpse immediately attempted to screw over these farmers.
neighbor was pretty het up over it at the time.
i grow wheat and vetch in winter as a cover crop in my large raised beds…but its hardly enough to make a difference,lol.
mostly just save the seeds for next year(and vetch was a staple in Roman times, btw)
We had a somewhat analogous exchange here not too long ago: someone noted that corn (maize to non Americans) and soybeans are not human food crops, iirc, andI semi-jokingly noted that soybeans were practically the only food available for humans when and where my grandparents were still in their prime years (circa 1940, NE China). Of course, corn and soy eans haven’t gone the way of bitter vetch, I guess…
There has undoubtedly been a huge reduction in crop variety over the past century or so, but there are complicating factors. Within individual crops, there is more and more reliance on a genetically limited range. Also, specialisation has led to reduced variety within individual farmholdings, although this hasn’t always been a straight-line process – peasant farming in some circumstances generally favoured specialisation too. There are exceptions, where farmers have become more adept at identifying specific niches within landholdings – this has noticeably reversed specialisation in some European biomes. Globalisation has also resulted in unparalleled interdependence – for example, the use of huge grain surpluses in the US and Brazil feeding into pork production in Europe and China.
But there is rarely a direct line connection between crop failure and starvation. An example would be a comparison of the Irish famines of 1741 (Bliain an Áir – the year of slaughter) and the Great Famine (Gorta mor – the great hunger) of 1845-). The former was due to an intense cold snap across Europe that caused mass crop failure across most crops. The result was a short term crisis that killed perhaps 10-15% of the population. But thanks to rapid action by the then semi-independent Irish Parliament (dominated by aristocratic Anglo-Irish landowners), conditions recovered quickly thanks to direct intervention in the market and importation of grain from the Americas.
In contrast, the 1845 famine struck just one crop – the potato – agriculture was very diversified in Ireland at the time as there was an ongoing transition from grain to beef products. The famine was aggravated by a very low level of genetic diversity in the main potato crop (much less diversity than in modern potato cultivation). But Ireland was under direct rule at the time from England and there was, in contrast to a century before, a refusal to ban food exports and additional imports of American maize proved too late and in inadequate quantities. In fact, if the only surviving records had been shipping inventories in and out of the country, you probably wouldn’t even know there was a famine. But the result was a death rate of around 20% of the population at least – there is a view among some historians that it was actually much more, maybe around 40%, as it is likely that pre-famine census records of the time hugely understated rural populations.
So in reality, famines, whether regional or worldwide, depend on a range of interrelated factors, of which crop growth is just one. The world could probably soldier on perfectly well with a major series of crop failures if we had the foresight to just slaughter pig and chicken populations on the first sight of trouble and insist on grain crops being fed to humans only. But this is easier said than done – there was, for example, a huge reluctance by the Chinese government to reduce hog populations in the face of swine flu and environmental damage. Pork is to Chinese what hamburgers are to Americans – a symbol of the good life and prosperity. Its very hard to persuade people to swap to lentil rice or oats until they have no other choice.
ongoing crop breeding and research has been factoring in a warming world for sometime, be it at the local, state, institutional, federal, international level. that’s worldwide, that’s all gov’ts, tremendous adapatablity is built in, yet the just in time mindset permeates the supply chain worldwide and animal feeding continues. the trade uses the futures markets to adjust relative values at somewhere around 10X the actual, physical production. risk and reward are not evenly distributed with gov’ts as backstops. the dizzying amount of innovation from seeds to skies will mitigate but not prevent a planet wide disaster, they’ll be no imports from Mars or Venus!
Several years ago when i was working on a regional groundwater problem in central MN I had the chance to ask the local farmers why they only grew corn and soy. Their responses were that the processing hubs for other crops suitable for their land (they named edible beans and carrots as examples) were too far away to be useful, meaning the round trip shipping time made harvest impractical. They surprisingly didn’t cite price for those crops. I’m not an agronomist or a farmer so I assume there’s nuance to their answers that I missed.
Corporate consolidation plays a large part in where the processing facilities are located, which then affects what crops get planted where.
Shawn Hackett in his latest missive….”Our overall thesis is that a corrective phase Is expected over the summer that could culminate into an
August bullish turning point that leads to a surge in commodity prices and many agricultural
commodity prices to new all-time highs exceeding that which was seen during Covid.
When we look at the charts of the Chinese agricultural commodity index that we created and you
look at the Goldman Sachs commodity index both of them went to key overhead resistance levels
which one would expect to see a corrective phase and some congestion as the market absorbs the
huge move that occurred since the fourth quarter of 2025.
Our overall view of the commodity inflation cycles that we follow and that we shared with you
several months ago continues to support a much bigger surge in commodity inflation heading into
2028 and potentially carrying over into the early 2030’s.
By no means do we believe that the geopolitical chaotic cycle has ended… it’s simply due for a
pause. We believe strongly that once we approach and go through the US midterm elections and we
get to the other side of that we’re going to see geopolitics escalate far beyond what we saw during
COVID and far beyond what we saw here recently with Iran. We still feel that the focal point for this
geopolitical crescendo cycle which is expected to peak in 2028 ± a year is going to be Russia/Ukraine
as we still feel that is the center point for what is to take place while Iran and what could be Taiwan
are ancillary geopolitical agitants but we don’t believe that those are actually the core center of the
geopolitical struggle.
When we put together the increasing weather volatility cycle that’s already underway and will
continue to escalate as we approach the trough of the next 11 year solar cycle in 2028 that will lead to
a decade of no sunspots at all, we would expect to see a more persistent and amplified la Nina effect
which disproportionately directly impacts North America, Russia Ukraine and Europe along with
central South Brazil into Argentina.
There will be intermittent short lived El Ninos not dissimilar to what we’re seeing occur this year
that will amplify the opposite condition which is disproportionately adverse for weather in Asia and
central northern Brazil. When we run the combination of increased overall weather volatility from
the quieting of the sun and the typical increased weather volatility that comes from reaching the
typical trough of the 11 year solar cycle and the amplified effects of having a no sunspot 11 year solar
cycle coming which means no sunspots for a decade along with a geopolitical cycle peak in this 2028
to 2030 timing window, the opportunity for maximum supply shortages whether from weather
related effects or whether from geopolitical effects should compound to create a perfect inflationary
commodity storm to the upside.”
It appears that the Human population is going to be “Right Sized” starting this year.
In the most brutal way possible.
It is increasingly looking like a ‘perfect’ storm.
You can have efficiency and double down on interconnectedness or you can have resilience.
Choose wisely …
Get real– only a very, very few “you” have any say in the matter, and those who do are gonna choose short-term ROI: they’ll be eating steaks in the Virgin Islands while you’re grubbing for worms and insects to eat… unless you “choose” to starve.
It is depressing that such potential for food disaster can be found while totally ignoring the war in the Mideast, and resulting shortages of fertilizer and tractor and truck diesel fuel. If only someone like Nassim Nicholas Taleb had written a popular book that carefully described the dangers and solutions to Black Swan events.