Global Warming May Increase U.S. Corn Price Volatility

The volatility of U.S. corn prices—how much prices fluctuate—is predicted to increase sharply in response to global warming over the next 30 years, mostly due to an intensification of heat waves in the primary region where corn is grown, according to a new study in Nature Climate Change. The authors find that the effects of climate change on the corn market will likely have a far greater influence on corn price volatility than other factors such as oil prices and government biofuel mandates, and these effects can be reduced with closer integration of the agriculture and energy markets. Surprisingly, even with such a large impact on corn price volatility, the authors find only a small impact on food prices.