Insight Focus

  • The American Climate Prediction Center has confirmed an El Niño this year.
  • Dry conditions could cause cane yields to fall in Mexico.
  • American wheat and corn should benefit.

What is El Niño?

The American Climate Prediction Center (ACPC) has officially confirmed an El Niño this year. El Niño is a weather event that occurs in periods of 2-5 years when the surface waters in the eastern Pacific become warmer. As the ocean warms the atmospheric pressure in the region decreases. These changes affect each region and country differently. The last major El Niño occurred from 2014 to 2016. Then there was a weaker one in 2018/19.

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Mexico

During El Niño, Mexico experiences more rain during the winter, followed by an arid summer. A summer drought could adversely affect cane development in Mexico as the crop needs rainfall through the middle of the year to grow and mature fully. This could lead to lower yields as more than 60% of Mexican cane is not irrigated. Rain during the winter could also delay cane harvesting.

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However, each El Niño is different and there’s no guarantee that there’s an adverse effect on cane. Mexico did not suffer from reduced sugar production during the major El Niño between 2014-16, but the minor El Niño in 2018/19 led to widespread drought, lowering sugar production.

United States of America

El Niño brings higher than average rainfall in the corn-producing regions of the country. The El Niño induced rain should help alleviate the drought affecting the US’s corn belt. USDA meteorologist Brad Rippey says, “From a drought standpoint, that ultimately should be good news for these drought-affected areas of the Great Plains because that should help this transition out of drought.”

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Source: National Weather Service Climate Prediction Center

Then winter pasture crops such as wheat, rye, and oats should also benefit from El Niño’s rain. Historically both corn and pasture crops have had high production during El Niño’s years.

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Adrian Torrebiarte

Adrian joined the analysis team in 2022, right after graduating from Babson College in Boston, MA, with a bachelor’s degree in finance. He has experience interning at a cement factory and micro-finance bank in Guatemala. Adrian is currently responsible for writing content for the Americas (excluding Brazil) and creating data tools and services for PET, Starches, and other commodities.

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