The cost of produce in the U.S. is continuing to rise as crops dwindle from increasing levels of climate change.Vegetable prices in the U.S. are around 40% higher this year and experts are saying climate change has played a prominent role. Bloomberg is reporting that Arizona produces 90% of leafy greens in the U.S. from November through March each year, but crop production has been greatly affected this year by a drought forming from reduced water levels in the Colorado River.
The decreasing amount of snow and rain has dwindled in recent years, moving into its 23rd year of drought, causing the Colorado River to shrink, according to research by Nature Climate Change.
The U.S. announced it plans to withhold about one-fifth of the water next year that’s given to Arizona’s farmers as climate change and the drought impact the Colorado River.
Meanwhile, California is known as the top state in the U.S. for agriculture but has faced severe droughts this year, resulting in $3 billion worth of losses, and after Hurricane Ian and Hurricane Nicole made landfall in Florida, it cost the produce industry nearly $2 billion across the state.
The loss in agriculture has prompted a rise in retail prices across the U.S., helping to drive inflation costs to the highest levels in 40 years. “There’s just not enough water to grow everything that we normally grow,” Don Cameron, president of the State Board of Food and Agriculture, told the Times of San Diego.
The cost of produce was up by 38.1% in November from the previous month, and the producer price index, which measures what companies are paid for their products, increased by 0.3% in November compared to the previous month, and increased 7.4% from a year ago, according to the U.S. Bureau of Labor Statistics.
Scientists have warned against climate change for decades, saying increased global temperatures will bring about extreme and unusual weather changes. The National Oceanic and Atmospheric Administration reported as of October of this year, there have been more than a dozen weather or climate disaster events, resulting in over $1 billion in losses in each instance.
“Every year the farmers who feed our nation get smarter and more resilient, but it’s increasingly stressful to adapt to the extreme variability they face,” Erica Kistner-Thomas, with the U.S. Department of Agriculture’s National Institute of Food and Agriculture, told USA Today. She added, “One year they’ll have the best year ever and then the next year they’ll be hit with a major flooding event or drought.”
Paul Mitchell, a professor of agriculture and applied economics at the University of Wisconsin, Madison told the outlet although “crops are more resilient to dry weather than they were 20 years ago,” as the events devastating crops become more frequent, crops won’t be able to adapt quickly enough.
“U.S. agricultural productivity is rising, but it’s not becoming more resilient to extremes,” Mitchell said and questioned, “When bad years start to line up, are we doing things to prepare for the unusual as it becomes more usual?”
https://gizmodo.com/food-prices-climate-change-inflation-drought-1849883609 ....
Its still not too late to get in on agriculture HODL.
The cost of produce was up by 38.1% in November from the previous month
If it was possible to buy and hold produce, investment holdings could conceivably appreciated in value 38% in roughly 31 days.
Unfortunately, produce is a perishable commodity which makes it difficult to hold over the long term. Investors have access to futures contracts can allow them to HODL agriculture sectors if they believe prices will rise. This is the typical approach for wealthier investors.
What options do those with less disposable income have? A pack of seeds can cost as low as $5 which could conceivably allow for percentage interest on gains within an entry level setting. If it is possible to grow $50 of food from a $5 pack of seeds, then in theory 10x return on investment becomes possible.
Another approach could be for stablecoins pegged to the value of agriculture commodities. For example, if there was a theoretical crypto token called potato coin, which guaranteed it could be exchanged for 5 potatos. Said crypto token could be pegged to the value of potato commodities. This could be useful in various circumstances. Can anyone guess how?