DROUGHT - LA NINA
SANDRO FILIPPO PUGLISI
Ag commodities' markets scholar (wheat, corn, oilseeds); Energy prices & stock indexes' analyst; Fintech, NFTs, DeFi, Tokenization, Digital trade's enthusiast.
North America grain, oilseed and pulse production in 2020 was amazingly good given the environment that some crops were given to develop in.
Drought impacted a huge part of the continent this year extending from the heart of Canada’s Prairies through the northern and western US Plains and all of the far western states into northern Mexico.
World Weather, is concerned that this year’s dryness is a foreshadow of more drying that eventually will bring hardship to farmers in the continent and perhaps the same may come to other parts of the world in the years 2021-23.
Just what we need after all the struggles of 2020 is some forecaster standing over the marketplace beating his chest implying drought years are ahead. Do we really know enough about the world’s weather to make such a blatant statement? Probably not, but the statistics speak for themselves.
The one thing farmers have going for them that no other producers in the history of man has had is the genetics that can help crops cope with dryness much better than 30 or 40 years ago.
To a large degree, the success of this year’s crops can be attributed to the combination of improved seed genetics, favorable subsoil moisture and some well-timed rain events that gave crops just enough moisture to carry on development without losing too much yield.
Sure, there were some low yields noted in many areas from Canada into the western Corn Belt and a part of the US Great Plains, but it could have been much worse.
Weather is cyclical. You can find a multiplicity of patterns playing out at the same time on any given day of the year, but each of those patterns has a different period of repetition so that it is rare for all of the patterns to line up the same way they did decades ago to induce the same level of weather extreme that occurred once before. It is much like going to the casino and pulling the arm of a slot machine and matching the pattern of wheels spinning in the window. The odds of getting similar symbols to line up in the slot window are very low, which is why most folks lose their money.
The weather can be similar with each of the patterns of repetition repeating at different periods and it is difficult to get them all to line up as they did once before. But the theory of chaos says the more times you spin the slot machine and the more times you let the weather patterns repeat, the more likely they are to line up as they did once before.
It has been a long time since North America has dealt with multiple years of drought.
These periods of dryness that last years instead of months were noted periodically in the late 1800s, the 1930s, 1950s and to some degree in the 1980s. Despite climate change theories and the lack of seeing dry years return in multiplicity, they will return again and World Weather, Inc. believes the stage for such an event may be evolving now. North America has recently left behind one of the wettest periods in history and upon exiting that period we have seen much less precipitation impact North America, especially in this past year.
Drought does exist in Canada’s Prairies, Mexico and most of the western United States, and with La Ni?a around this winter the odds are very good that some of these drier-biased areas will not get adequate moisture replenishment prior to spring.
Coming into spring with poor soil moisture is always a bad omen, especially if temperatures turn warmer than usual early in the growing season and rainfall remains below average. It does not take long in the spring for such a drier bias to get out of control and once moisture shortages are present during the warm season, it is very difficult, although not impossible, to get the soil replenished with moisture once again.
In addition to concern about dryness remaining over the winter this year, there is La Ni?a. Many of the more significant La Ni?a events that last longest and are most intense tend to occur between the solar minimum and the solar maximum. The solar minimum was reached earlier this year and the maximum is expected in 2025.
The longer La Ni?a events last the more they drain moisture from the atmosphere in the middle latitudes.
If the current La Ni?a event lingers into spring and temporarily goes away only to return again later next summer, the environment would be similar to those La Ni?a events of the 1950s and 1970s and possibly the 1930s, although there is not much reliable data from back then.
La Ni?a events also tend to be associated with more heat and cold because as moisture is removed from the mid-latitudes, the air will heat and cool much faster. Notice the temperature extremes in the dry areas of the Plains and Canada this late summer and autumn. The gyrations have been very impressive.
Pacific decadal oscillation
Then there is the Pacific Decadal Oscillation (PDO).
Ocean temperatures in the central Pacific Ocean determine the phase of PDO.
Basically, in an overly simplified definition, cooler-than-usual ocean water off the West Coast of North America can lead to negative PDO, and negative PDO events during the summer promote stronger high-pressure ridges aloft over central North America.
PDO has a tendency to be in one phase or the other (warm or cold) over many decades at a time before changing its phase.
The last short-term bout of negative PDO occurred in the 2010-12 period, which helped contribute to the mega drought of 2012, which, by the way, also occurred after La Ni?a prevailed over a two-year period.
World Weather, believes this setup may return again in the next couple of years and a close monitoring of the situation is warranted.
Quite often the drier bias that occurs in the United States because of a multi-year La Ni?a event is mirrored with dryness in a part of Russia. There were some hints of that in 2020 and there are some areas in southern Russia and Ukraine that are still quite dry like that of western North America today, raising more concern that a period of more significant dryness may be lurking in the next couple of years.
In the meantime, there is South America, which also is feeling the effects of La Ni?a today with recent dryness in Argentina and talk about possible dryness in southern Brazil.
These trends often are associated with La Ni?a events, and even though there has been significant rain recently in Argentina, that does not mean that La Ni?a will not deprive a part of that nation from extremely important rainfall later this year.
The threat of dryness in South America is greatest for southern Brazil, Uruguay, southern Paraguay and extreme eastern Argentina.
Dryness in those areas during their summer and a possible more challenging weather pattern in North America in 2021 and/or 2022 might lead to more rising futures prices and general costs for many food companies.
That makes now an excellent opportunity for the smarter businesses to begin making strategic investment decisions to protect their bottom lines just in case we are heading for more trying times from an agricultural perspective.