How will El Nino Modoki affect South America’s Crops

How will El Nino Modoki affect South America’s Crops
Sep 29, 2023

NOAA just released their latest forecast suggesting that El Nino will only be short lived

By Colin McNaughton Risk Management Intern

Most weather forecasters are projecting a conventional El Nino for South America for the 2024 growing season which means good weather and record crops. But NOAA just released their latest forecast suggesting that El Nino will only be short lived into Q4 of 2023 as the warm temperatures in the Pacific Ocean are cooling.

El Niño Modoki is a distinct variant of the more commonly known El Niño weather phenomenon. Unlike the traditional El Niño, El Niño Modoki features warmer sea surface temperatures in the central Pacific Ocean, while the eastern and western parts of the Pacific tend to be cooler. This contrasting temperature pattern sets El Niño Modoki apart and has specific implications for South American agriculture.

One of the key consequences of El Niño Modoki is the reversal of moisture patterns. In a typical El Niño event, moisture is pushed into South America, benefiting agriculture by providing much-needed rainfall. However, El Niño Modoki disrupts this pattern, drawing moisture away from South America. This disruption is particularly problematic for regions heavily reliant on consistent rainfall for their crops.

Central and western Brazil, where approximately 60-70% of the country's soybean and corn production takes place, are particularly vulnerable to the effects of El Niño Modoki. The reduced moisture availability in these regions significantly increases the risk of drought. Such drought conditions can lead to water stress for crops, potentially reducing yields and impacting farmers' incomes.

However, amid the challenges, El Niño Modoki can also present opportunities for agricultural producers. The disruption in moisture patterns and the heightened risk of drought can lead to temporary supply shortages in affected regions. These shortages can, in turn, drive up commodity prices, offering farmers the opportunity for selling at higher prices during the winter months, possibly by December or early 2024.

The impact of El Niño Modoki is not uniform across South America. While central and western Brazil face dry conditions, the southern regions, including Rio Grande du Sul, Paraguay and Argentina, tend to experience increased rainfall. This divergence in weather patterns can create a stark contrast in crop performance between different parts of the continent.

In Brazil, El Niño Modoki is expected to bring more rainfall to the southern regions, but less to the north. This has implications for the Amazon rainforest, which is already facing challenges due to changing climate patterns. During the dry season, some areas are already experiencing temperatures 2.5°C higher than normal and a 30% reduction in precipitation.

When El Niño Modoki compounds these conditions, it elevates the likelihood of forest fires, posing significant environmental risks. Argentina, which has been grappling with drought-related crop losses, may benefit from the increased rainfall associated with El Niño Modoki. While the relief of rainfall is welcomed, the United Nations' Food and Agriculture Organization has cautioned that excessive rains in some areas of Argentina could introduce unpredictability in crop performance. Striking the right balance becomes crucial for agricultural planning.

In summary, El Niño Modoki presents a unique weather pattern that can disrupt traditional expectations of El Niño's impact on South American agriculture. While it may bring drought conditions to central and western Brazil, potentially leading to price spikes, it can also increase the risk of forest fires and introduce uncertainty in crop outcomes.

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