Lisa Goddard, director of Columbia University’s International Research Institute for Climate and Society, talks to Agri Investor about the impact of El Niño and La Niña on agriculture and urges investors to utilise monitoring technology.
How do El Niño/La Niña interact with agriculture?
El Niño and La Niña are ocean atmosphere phenomena. El Niño refers to a change in sea surface temperatures in the equatorial, central and eastern Pacific Ocean. La Niña is when the equatorial ocean temperatures become colder than normal, and these events happen about every four to seven years. It’s cyclical, but not regular. We know that there are quiet periods and active periods; during the active periods, it’s more predictable.
El Niño and La Niña are connected to agriculture because they shift patterns of rainfall, and that also influences the patterns and strength of temperature. Those temperature changes have an impact on agriculture. They cause drought in the tropics. That drought, combined with high temperatures, can cross thresholds that are not good for agriculture. In higher latitudes, the warmth may elongate the growing season.
What regions and crops do you expect will be most impacted by La Niña in the short term?
The types of agricultural areas that are impacted by drought during a La Niña are the soybean-growing regions of southeast South America, the southern tier of the United States and parts of China. It really depends on whether or not the impact comes at an important time during the growing season. Again, increasing temperatures on top of that can exacerbate any problems experienced in terms of drought.
What about the long-term?
You might not be able to make a forecast for what will happen six years from now, but if you are investing in a place that typically has an El Niño impact you might know that the chance of it getting an El Niño is pretty good over the next five or 10 years, because El Niño typically happens every four years.
There is seasonality to when big impacts or regional variations happen. For example, Eastern Africa expects heavy rainfall during an El Niño event, which typically happens in October through December.
How should investors factor in El Niño/La Niña when evaluating investment strategies over a 15 to 20 year time frame?
It is important to know what parts of the world have consistent El Niño/La Niña impacts, because they are going to be hit by one or the other over a 20-year time frame.
Also, I would suggest starting to take advantage of the monitoring technology that really didn’t exist 10 years ago for seasonal forecasting. High-resolution, satellite monitoring and forecast capabilities that exist now are really big advances which the commodities market and agricultural business can take greater advantage of, and first adopters are going to come out best.
How has the heightened profile of climate issues and agriculture influenced the discussion around El Niño/La Niña?
There has been a lot of media hype recently because we had a very big El Niño event last winter. We had another very big event almost 20 years ago and it inspired a lot of questions about the relationship with climate change and whether El Niños will become more frequent. But there’s really no strong scientific evidence to suggest that that is the case.
The agriculture community here in the US was very upset with the National Weather Service (NWS) because they had a La Niña watch, then cancelled it in September, then they put it back out again in October. I found the fact that this information not only upset people, but moved markets, really shocking.
The information itself – the forecasts for the likelihood of a La Niña event, the subsequent forecasts for what that would mean for regional climate, even the observations – had not changed that much in the month between NWS pulling back their statement and putting it back out again. If any of those people who were upset had been talking to a climate scientist or a forecaster who knew what they were doing, they would have sailed right through that without getting worried. There is a very big disconnect between the science and the decisions that are being made.
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