The food industry, which relies on global trade to make up nearly one-third of global GDP, is now preparing for climate change by changing the way it delivers food to consumers.
Climate change, in which temperatures rise and sea levels rise, will cause widespread shortages and the introduction of higher prices, according to a report released this week by McKinsey & Company.
The McKinsey report, The Food Chain, said climate change is the biggest challenge facing the food sector.
While food prices are expected to increase in many areas of the world due to climate change, some areas may not see the impact of climate change.
In the US, for example, food prices rose by $5.6 billion in 2018 as a result of the drought, according the report.
“There are no guarantees that the impacts of climate are limited to the US but we can be confident that global food demand will continue to rise due to the changing climate,” said Jeff Schulman, McKinsey Global Institute co-founder and chief executive.
“While we are seeing record-breaking temperatures, we also see record-low snowfalls, record-high temperatures, and record-shattering droughts and floods.”
The report says the global food supply chain is also changing.
The report found that while the demand for food and milk has been increasing over the last two decades, prices have not increased as fast.
“Food and milk prices have risen at the same rate as overall food demand,” it said.
The study said there are a range of factors that can drive the price of food, from rising demand due to increased economic activity and population growth, to a rise in commodity prices, to rising health costs.
“Food prices and production costs have increased substantially as well,” the report said.
“The increasing global supply of food is causing prices to rise.
This means that a substantial portion of the increase in prices is being driven by food prices, not increased production or increased consumption.”
The US is among the countries where climate change will have the greatest impact on food prices.
The US Department of Agriculture (USDA) has projected that food prices in 2018 will be 7 percent higher than they were in 2016, while prices for milk, meat and eggs will increase by 17 percent.
“In 2017, prices were 7 percent lower than they would have been in 2021,” the USDA said in a statement.
The USDA said the US could see food prices increase by 5 to 15 percent.
The USDA expects to see an increase in inflation of 4 percent in the US.
McKinsey said the impact on farmers will be minimal as there will be more supplies and fewer challenges to raising prices.
“Climate change will not necessarily impact the availability of agricultural commodities, and climate change impacts on food supply are likely to be small relative to the economic impacts that they will have on consumers,” the McKinsey researchers said.
McNays report found the average price of a loaf of bread in the UK rose by 4 percent between 2018 and 2020, while in the USA it rose by only 1 percent.
McKenzie said the report highlights the importance of food supply chains.
“Consumers are already paying for food in many different ways, including buying more than one food item, and they are also consuming more than their fair share of carbon dioxide,” McKinsey said.
It said climate-related impacts are also being felt in the food supply, such as increased costs for food production, increased costs to transport food and increased costs associated with health-related costs.
McConnell said that the report emphasises that the food and beverage industry will continue making changes to help mitigate climate change in order to adapt to climate changes.
“What we need to remember is that the majority of food production is done in the world’s poorest countries and it is in the interests of these countries to be able to sustainably produce and sell food and beverages for their people,” he said.
He said the industry needs to work with other sectors to prepare for the impacts, and that they should use the data in the report to develop strategies for reducing food and water pollution and ensuring sustainable food production.