The Ceres group is a non-profit organisation linking businesses and investors to encourage leadership on climate change and sustainability issues.
The paper’s panel of expert reviewers includes a cross-section of environmentalists, academics, and sustainability analysts from major food corporates including Coca Cola, Kellogg and General Mills.
Almost a third of US crop land is committed to grain growing. About 40% of it is used for animal feed and a similar amount for ethanol production.
As the country’s key grain growing regions try to put last year’s devastating drought behind them, report authors maintain the Midwest drought is but a taste of what is to come, a “new normal” in many parts of the Corn Belt.
The US$65 billion-a-year industry has doubled in scale over the past decade, in part fuelled by a government policy to commit 40% of the 350 million tonnes of grain production into ethanol.
Drought and tight global supplies have exacerbated volatility of grain prices, with prices ranging from US$2 a bushel to $8 a bushel at the height of the drought in 2012.
The report highlights water shortages as a key issue in coming years. The combination of corn being a thirsty crop, and high planting growth rates in water-limited areas, means over half the country’s irrigated corn production relies on water from the High Plains aquifer, supplying the major grain growing states of South Dakota, Wyoming, Kansas, and Oklahoma.
Grain growers do not have exclusive claim to the High Plains aquifer. While providing 30% of the country’s ground water supply, it provides water to 82% of people living in its boundaries, but agriculture accounts for 97% of its use. The report likens the aquifer’s depletion in some areas to mining, with more arid zones recording a decline of 50m in aquifer thickness over the past 100 years.
A 10m threshold is regarded as the limit for irrigation take, and Ceres estimates 36 counties will reach that before 2050. About US$2.5b of corn is grown in these regions with depleting aquifer levels.
That risk is compounded by also relying upon the highly stressed Californian Central Valley aquifer.
A further quarter of the country’s grain production is sourced from regions with high levels of water stress, leaving no freeboard should climate change require crop irrigation in the future.
Government policy to commit to energy inefficient corn for ethanol projects means 12 ethanol refineries in the High Plains region are sourcing corn in areas experiencing cumulative declines in ground water levels. Half of the refineries are in areas classed as extreme for water decline.
The Ceres group has outlined some pragmatic and necessary moves the industry needs to make in order to preserve its future in a more stressful growing climate.
This includes requiring companies sourcing grain-based products to have a policy around sourcing grain-based goods that are grown more sustainably, something already done by Walmart from 2013 and Coca Cola for its fructose corn syrup supply.
In an echo of NZ’s current assessment of nutrient losses and catchment sensitivity, Ceres also recommends higher risk geographic areas be identified and prioritised in terms of water depletion, nutrient losses, and groundwater pollution.
It also recommends investors get full disclosure by a company to its climate and water related risks, as the threat of global warming becomes a reality for a country that until recently denied it was happening.
