Corn Production Shocks in 2012 and Beyond: Implications for Food Price Volatility

26 Pages Posted: 30 Dec 2012

See all articles by Steven Berry

Steven Berry

Yale University - Department of Economics; National Bureau of Economic Research (NBER); Yale University - Cowles Foundation

Michael Roberts

University of Hawaii - Department of Economics

Wolfram Schlenker

Columbia University - School of International & Public Affairs (SIPA)

Date Written: December 2012

Abstract

Corn prices increased sharply in the summer of 2012 due to expected production shortfalls in the United States, which produces roughly 40% of the world's corn. A heat wave in July adversely affected corn production. We extend earlier statistical models of county-level corn yields in the Eastern United States by allowing the effect of various weather measures to vary in a flexible manner over the growing season: Extreme heat is especially harmful around a third into the growing season. This is the time when the 2012 heat wave hit the Corn Belt. Our model predicts 2012 corn yields will be 23% below trend. While extreme heat was significantly above normal, climate change scenarios suggest that the 2012 outcomes will soon be the new normal.

Suggested Citation

Berry, Steven T. and Roberts, Michael and Schlenker, Wolfram, Corn Production Shocks in 2012 and Beyond: Implications for Food Price Volatility (December 2012). NBER Working Paper No. w18659. Available at SSRN: https://ssrn.com/abstract=2194784

Steven T. Berry (Contact Author)

Yale University - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Yale University - Cowles Foundation

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Michael Roberts

University of Hawaii - Department of Economics ( email )

Honolulu, HI 96822
United States

Wolfram Schlenker

Columbia University - School of International & Public Affairs (SIPA) ( email )

420 West 118th Street
New York, NY 10027
United States
2128541806 (Phone)

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