Amir Lehr, the CEO of Acclym, perceives the global agricultural supply chain as one beset by a plethora of unpredictable pressures. His company, which focuses on digitising and modernising supply and value chains, is at the forefront of addressing the increasingly uncertain landscape shaped by climate change, geopolitical strife, and fragmented infrastructure. "The supply and value chain is really suffering today," he asserts, pinpointing climate change as a central culprit.

Recent reports reveal that the upcoming year is projected to be historically alarming, with surface temperatures forecasted to exceed 1.8 degrees Celsius above pre-21st century levels. Such warming conditions disrupt long-established weather patterns and agriculture, creating an environment of unpredictability. This volatility manifests in various forms—droughts, floods, and shifting growing seasons—all of which jeopardise crop yields and threaten the stability of agricultural supply lines. A recent EU-backed report indicated that extreme weather alone costs the European agricultural sector an average of €28.3 billion annually, representing a staggering 6% of total crop and livestock production.

Lehr highlights the urgent need for resilience in the food and beverage sectors, which often rely on sourcing from numerous small farms globally. For example, he points to the struggles of coffee companies working with various growers, where inefficiencies amplified by unpredictable weather can lead to dramatic yield losses. He recalls a specific instance where untimely rainfall resulted in a 26% reduction in coffee yield for a customer. Real-time visibility into supply chain operations emerges as a crucial necessity; it allows better assessment of weather patterns, local conditions, and economic factors, enabling more informed decisions to mitigate risk.

One promising development lies in the digital traceability systems that have gained traction within the industry. Such systems enhance operational efficiencies, streamline food safety protocols, and build consumer trust through transparency. However, Lehr argues that effective integration of digital tools remains inconsistent across the sector. Many technologies, including mobile sensors and enterprise resource planning (ERP) systems, exist but are not widely adopted.

Compounding these challenges are the financial pressures inflicted by tariffs and geopolitical tensions. Sourcing grapes from multiple regions like California and Latin America highlights this reality. The evolving tariff landscape complicates pricing structures and increases financial strain on producers, as evidenced by the volatility affecting crop quality and consistency.

The quest for sustainable agricultural practices is also increasingly shaped by these disruptive forces. With climate change influencing growing regions—where traditional yields may shift locations—efforts to develop climate-resilient seed varieties are underway. Regenerative agricultural practices, while often spearheaded by larger farms, hold promise for long-term benefits, including enhanced biodiversity and improved soil health. However, cultivating these practices requires a fundamental restructuring of relationships and workflows within the supply chain.

The current agricultural landscape is further exacerbated by a host of external pressures. Recent analyses highlight a concerning trend in food inflation, driven largely by climate-related disasters. For instance, olive oil prices spiked by 27% in the U.S. due to droughts impacting Spanish olive harvests. Projections indicate food inflation could rise by as much as 50% by 2035 and potentially reach 200% by 2060 if action is not taken to confront these risks.

Lehr and other industry experts advocate for a cooperative approach to building resilience within global food supply chains. Proposals include establishing supply chain climate adaptation plans (S-CAPs), aimed at identifying vulnerable sectors and formulating strategies to buffer against risks. International collaboration and innovation in agricultural finance are deemed essential for stabilising food prices and ensuring food security amidst climate unpredictability.

Despite the myriad challenges, there is a glimmer of optimism surrounding the agricultural sector’s ability to adapt. Improving the supply chain is not solely about technological advancement but also about fostering meaningful connections between farmers and food producers. With the right tools and a commitment to adaptive practices, it is possible for supply chains to evolve into smarter, more resilient systems capable of withstanding the effects of a warming world.

Reference Map:

Source: Noah Wire Services