Dr Andrew Coburn, chairman, Risilience says the looming super El Niño will have profound effects on the world’s food supplies.

Scientists from the UN warn that a Super El Niño is likely to happen before September which leaves little time for food manufacturers to prepare for the large systemic risk it will cause to global food supply chains.

An El Niño shock could trigger multi-billion-dollar disruptions across the highly concentrated global food economy, compounded by supply chain fragility, fertiliser shortages, and structural inflation.

Rising geopolitical uncertainty and the accelerating impacts of climate change are putting unprecedented strain on global food systems. For food and beverage businesses, this volatility is driving supply chain disruptions and higher consumer prices, with a potential Super El Niño threatening to worsen existing pressures on profitability.

The financial risk of a Super El Niño

While El Niño is a well-known climate pattern characterised by warming Pacific Ocean temperatures and weakened trade winds, an extreme El Niño event poses a serious threat to agribusiness margins, undermining the profitability of food producers, retailers, and farmers, while also driving unprecedented increases in food prices for consumers.

New analysis, El Niño 2026: Agribusiness at Risk, indicates that global agricultural production could drop by up to 14% in a worst-case scenario, resulting in an estimated $342 billion in lost production value (at 2025 prices).

Global food supply chains are at systemic risk 

Four crops, rice, corn, soybeans, and wheat account for approximately 60% of global calorie consumption.

This heavy reliance on a small number of staple crops increases the vulnerability of the global food system to climate-related shocks. While regional production shortfalls are typically balanced by supply from other markets, a global El Niño triggers “teleconnections”: simultaneous weather anomalies across different continents that can cause simultaneous disruptions across multiple agricultural regions.

A seemingly small drop in global supply can trigger disproportionately large price spikes, amplified by market panic, speculative trading, and government interventions. Some of the more severe forecasts imply levels of production shortfall that could push prices of some crops up by 50-100%. The most impacted crops, such as rice, palm oil, sugar cane, and coffee, could see significantly higher price surges, potentially experiencing spikes of 50% to 100%, or more.

Climate risks to global food systems

Changes in weather patterns affect both livestock health and plant physiology in multiple ways. Animal products such as meat and dairy are higher value per unit weight than grains or vegetables and play a significant role in the global food system. Cattle are increasingly vulnerable to shifting weather conditions, which can push them beyond their thermal comfort zones and lead to heat stress. This reduces feed intake and slows weight gain. Dairy cows are particularly sensitive; even a single day of heat stress can reduce milk production by up to 10% and negatively affect milk quality. Poultry production is also exposed to climate-related risks, including feed price volatility driven by crop failures, reduced availability of grazing, and heat stress.

Higher temperatures and reduced rainfalls impact arable production by causing heat stress in developing plants, which stunts growth and affects initial germination, pollination, filling and ripening. Each crop differs in the temperatures it tolerates and timing of their growth cycle, so changed weather patterns affect each plant type in different ways. Some changes can be beneficial – abundant rainfall and improved temperatures increase yields. But extreme conditions of prolonged drought can cause failure of root systems and even loss of the soil matrix itself, leading to dustbowls in previously productive regions.

The price of climate volatility

Past price shocks have struck one commodity at a time, but a Super El Niño could bring a simultaneous, cross-category surge, meaning consumers will be hit harder and broader than ever before.

Cascading market effects could follow. Price impacts can be heavily amplified by market panic, speculative trading, and government interventions. If El Niño triggers major shortfalls in rice production, it is possible that the governments of India, Vietnam and Thailand could enact export bans to feed their own populations, removing millions of tonnes from the global market and causing prices to escalate.

Driving long-term value through climate resilience

Supply chain resilience is developed through a strategic combination of two approaches: diversification to reduce risk and investment in more resilient agricultural systems. Companies that adopt this dual approach can generate a “resilience dividend,” gaining a strategic advantage that helps safeguard earnings during severe shocks. Rather than treating these as mutually exclusive options, an effective resilience strategy integrates both into a unified and coherent framework.

To navigate this volatility, food companies are shifting from reactive crisis management to a more proactive approach to climate resilience. The business challenge is now to develop a new operating model which prepares itself for a world in which volatility is the new normal.

Today, singular climate events like a Super El Niño create severe systemic risks are capable of trigger systemic risk that spans across multiple continents leading to correlated failures across global supply chains, agricultural regions and commodities. To prevent this, companies have begun rebuilding their climate resilience, to ensure that catastrophic disruption brought on by climate events, geopolitical uncertainty and commodity shortages. Companies who have built a robust climate strategy will be best prepared to transform volatility from a damaging operational risk into a lasting competitive advantage.