New Study Finds Satellite Yield Forecasting Can Lower Food Price Fluctuations

Global agricultural markets are closely connected. A recent paper from NASA Harvest’s Tetsuji Tanaka, Laixiang Sun, Inbal Becker-Reshef, Xiao-Peng Song, and Estefania Puricelli explores how satellite data can be used to study these connections. 

Impacts to agricultural production in one part of the world can heavily impact food availability on the other side of the globe, particularly when the disruption occurs in major exporting countries. Additionally, farming incomes can be heavily affected by the success or failure of crops far from their own fields. A nation-wide bad harvest can create a shortage and raise the price of a particular crop, while high foreign yields can create a large supply and lower prices. 

Farmers in opposite hemispheres are able to take advantage of their reversed planting and harvesting timelines and adjust their planting decisions accordingly. For example, soybean and corn farmers in Brazil pay close attention to developments in the United States and farmers in the U.S. do the same for major producing countries in the Southern hemisphere. 

With remote sensing of agricultural land allowing for regular updates throughout a growing season as well as timely forecasts of harvest yields, farmers are able to understand how production in the opposite hemisphere is performing, much earlier and better than ever before. 

The recent paper explores just how useful satellite data can be for this. The authors selected an abnormally good 2008 wheat harvest and abnormally bad 2012 wheat harvest in Russia and Ukraine as well as an abnormally bad 2012 soybean harvest in Brazil as case studies. 

They found that the use of satellite data allowed for an accurate forecasting of wheat yields up to two months before harvest. They also found that satellite data provided accurate forecasted soybean production in the Southern hemisphere up to a month before planting begins in the Northern hemisphere. 

They then integrated these forecasts into an economic model and found that early forecasting was able to reduce price fluctuations by up to 12% for wheat importing countries while completely reversing price shocks for some of major soybean importing countries.

With global agricultural production facing increased pressures from extreme weather, climate change, and regional conflicts, improving the timeliness and accuracy of yield forecasts is vital in preventing volatility in food prices and access. These results show how satellite data can create more robust forecasts and inform future efforts to combat food insecurity. The research provides economic justification for continued monitoring of crop growth from space.

The full study is available open access here.