KANSAS CITY — El Niño conditions have been around since late autumn of last year, but it was not until this spring that the event started becoming more traditional and the forecasts changed toward a significant event. El Niño has been known to create many problems around the world, but it is not all bad.
There are some places that find the precipitation anomalies more appealing, and as we have stated so many times in the past each El Niño is different. So where does this event rank among other El Niño events, and should we be running for shelter? The better question is about how the phenomenon will impact commodity futures prices and basic supply and demand for grain, oilseeds, sugar and other ingredient commodities essential to many businesses around the world.
El Niño is often misunderstood and often over-hyped. There is frequently too much fear bred by the media when El Niño events evolve, but in some episodes the hysteria might be justified. So far, this El Niño event has been rather moderate and somewhat uninteresting. Tell that to southern Brazil wheat, corn, citrus and sugarcane farmers and they might laugh at you after rainfall of 4 inches to more than 9.5 inches occurred in the first half of this month when it is normally much drier. Some other producers in Thailand would also suggest the event has not only created terrible dryness, but it may end up rivaling that of 1987, which was one of the worst drought years in recent history with tremendous losses in all crop productivity.
However, many eastern Australia grain and oilseed producers are quite pleased with the well-established wheat, barley and canola that has been blessed by regular occurring rain events from Victoria to Queensland in recent weeks. Western Australia, which does not usually have such a strong tie to El Niño events, also is expecting more rain in the second half of July that will translate to improved weather.
Much of India’s hugely feared El Niño affected monsoon season has featured nearly ideal conditions this spring and early summer. June rainfall was well above average, and wet weather has continued in July across eastern and northern parts of the nation. The favorable June weather got many farmers into their fields much faster than usual, and planting has surged far ahead of last year, which started off with six weeks of dryness because of supposed “developing” El Niño conditions. This year has brought a true El Niño to India, and the rainfall pattern is many times better than last year when an official El Niño event never materialized.
These kinds of variations for typical El Niño events are perfect in illustrating the fact that El Niño — no matter how big and all-encompassing it appears to be — is still just one anomaly in a complex atmosphere full of other trends and patterns that still have influence on how El Niño plays out.
This El Niño update is just a snapshot on how the event has performed so far. El Niño conditions are still intensifying, and it is expected to become a strong event in the next few weeks and months. The odds are high that the event will rival that of 1997-98 when its evolution is complete, but World Weather, Inc. is quick to suggest that just because its intensity will be similar, its impact around the world will be different.
So far, the event is off to a slightly faster pace in evolving and a little more intense than the 1997-98 event. The peak of the 1997-98 El Niño event occurred from September through December and into January when its intensity on the Oceanic Niño Index (ONI) varied from 2.0 and 2.3. The 1982-83 El Niño event was ranked the second strongest since 1950 when records began, while 1972-73 was next in line.
All indications suggest this El Niño event eventually will be as strong as the 1997-98 event with the latest data from the equatorial Pacific Ocean suggesting a reinforcing wave of warmer-than-usual ocean water will be arriving in the next few weeks to perpetuate the event. All computer forecast models around the world have suggested this El Niño event will be strong, and it will have staying power through winter 2015-16. World Weather, Inc. would not be surprised to find this El Niño being a little weaker than the 1997-98 event, but it still will peak out as a strong event. Its impact on the world still is going to be varied. It is already similar to the 1987-88 event, although that event was not nearly as strong as that of 1997-98, and yet its impact on India was many times worse.
World Weather, Inc. still believes that a decrease in coffee, cocoa and sugarcane production will occur in central Africa, Indonesia and Central America because of El Niño conditions. The event also is expected to hurt wheat production in southern Brazil and bring additional bouts of wet weather to sugarcane, citrus and some coffee production areas later this winter, but it will not be as wet as that of 2009, which had a significant impact on production in Brazil. Argentina has some dryness affecting its western crop areas, and winter wheat is not establishing as well as it should. The drier bias in Argentina likely will continue through the winter and into spring, raising some concern over early corn production and some wheat yields. Sunflowerseed planting also may be affected, but late corn and soybeans may be planted with slightly better crop weather.
Indonesia and Malaysia coffee and cocoa yields will be down because of less-than-usual rainfall in 2016, and the archipelago also may experience a poor rice and sugarcane harvest. Other crops will be negatively impacted, but to a lesser degree of significance, including oil palm, coconut and rubber.
Eastern Australia is expecting some trouble with spring rainfall. Traditional El Niño events may reduce rainfall across eastern parts of the nation’s wheat, barley and canola region, and that will be the case again this year. However, because of better-than-expected establishment this autumn and winter, crops will have a little better staying power when the ground trends a little dry. Production losses in 2015-16 should not be as great as those in years past, despite the strong El Niño event.
Similarly, India’s monsoon will run into some greater dryness in August and early September, but crops likely will be affected less severely than in past El Niño events. Crops in India are expected to be better established because of favorable June and late July rainfall, but some stress will evolve as the reproductive season evolves, and that is when production cuts will be possible.
Eastern China tends to experience less-than-usual rain in traditional El Niño events, and the same may occur this year, but World Weather, Inc. sees the precipitation in eastern China more timely, offering greater efficiency in crops absorbing the moisture and translating into the usable energy for favorable production.
Most of the media reports likely will credit this year’s impressively wet weather bias in the U.S. Midwest and central and southern Plains in May, June and July to El Niño. But El Niño only contributed to some of the already excessive rainfall pattern that was already in place, especially in May and early June. Some of the heavy rain in June was associated with Tropical Storm Bill, which cannot be blamed on El Niño. The wet weather that followed Bill probably should be attributed to El Niño. The milder summer weather in the U.S. Midwest also will be attributable to the El Niño event, and some of the dryness in western Canada this season also will be attributable to El Niño.
World Weather, Inc. believes when this El Niño event is over it will be more closely related to the 1987 event with less drought severity in India. North America weather will be more significantly altered by El Niño during late autumn and winter with extremely important drought relief for California expected. Additional wet weather also will occur in the southern United States along with dry and warm biased conditions for Canada’s Prairies. the northern U.S. Plains, Pacific Northwest and Great Lakes region relative to normal years.
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