BONITA SPRINGS, Fla. (DTN) -- Climate change has resulted in increased yields for corn in the Midwest, but it likely to result in lower yields by the middle of the 21st century due to increased volatility, a prominent climate economist told the Crop Insurance and Reinsurance Bureau (CIRB) meeting here on Thursday.
"There have been increases in corn yields between 1974 and 2019," Julia Borman, manager of the regulatory and rating agency team at the data analytics firm Verisk, said in a presentation to crop insurance executives gathered here.
That's due to warmer temperatures and an increase in precipitation in what is known as the Midwest warming hole, she said.
But over time, assuming plant genetics are unchanged, yields are likely to go down because there will be more weather variability and more "bad years" in which yields are below normal, Borman said.
Verisk, she explained, is trying to incorporate climate change into the models it already has to analyze the crop insurance industry's "perils" such as hurricanes, earthquakes, floods, forest fires, pandemics and terrorism. The firm undertook the analysis of the future for U.S. corn for the Brookings Institution in 2021.
Crop insurance and other industries use the models to try to predict potential losses in the next year and to figure out how much that will cost.
"If you rate house fires or car accidents you have a lot of data to work with, but with natural disasters there is significantly less data," Borman said.
Creating catastrophic models, which Verisk has been doing since 1987, begins with defining a hazard, trying to determine the local intensity, estimating the damage, adding in the policy conditions and ends with calculating the insured loss, she said.
Investors, she noted, are interested in adding climate change as part of their environmental, social and governance (ESG) analysis to identify risks.
"ESG is a big deal," Borman said. "There are increasing disclosure requirements. We anticipate further regulatory action."
There is an upward trend in losses, people are attributing what is happening to climate change whether that's the case or not, she said.
"We don't know enough about climate change but we know some things," she said, noting that it is clear that climate change "will drive extreme cold and heat," but less clear what impact it will have on drought, thunderstorms, wildfires and extreme snow or cyclones.
"Extreme weather is the primary reason for crop insurance losses," she said.
There are limitations to the model, Borman pointed out. The assumption that corn genetics won't change "is probably wrong," and there could be changes to the federally subsidized crop insurance program, she said.
Climate analysts always have to ask "What else could we have done? There are lots of other places to poke at."
-Verisk: Climate Change Could Cut Corn Belt Crop Yields by Up To 40 Percent Due to Increasing Unfavorable, Extreme Weather by Mid-Century https://www.preventionweb.net/…
-Quantifying the Impacts of Climate Change on U.S. Corn Yields https://www.verisk.com/…
Jerry Hagstrom can be reached at firstname.lastname@example.org
Follow him on Twitter @hagstromreport
(c) Copyright 2023 DTN, LLC. All rights reserved.