Climate-based measures of supply chain resilience

Purpose: Supply chains are a complex but integral part of the food distribution system with unique vulnerabilities, as agricultural production is a function of biological processes and food goods are perishable necessities. Various shocks, including pandemics, geopolitical conflicts and extreme weather events, can cause disruptions to the food supply chain. International trade often plays an adaptive role in mitigating the effects of these shocks as it allows for a market-oriented redistribution of resources that can mitigate the impacts of localized shortages and surpluses. Design/methodology/approach: With this in mind, our goal is to combine information on weather shocks and trade flows to propose novel supply chain resilience metrics focusing on key weather drivers in over 50 countries. We focus on the role of extreme heat (degree days above 29°C) for maize, soybeans and rice, but the approach is general enough to be widely applied to any combination of crops, trade partners and weather/climate variables. Findings: We focus on the role of extreme heat (degree days above 29°C) for maize, soybeans and rice, but the approach is general enough to be widely applied to any combination of crops and weather/climate variables. Leveraging globally gridded temperature data, we estimate the metrics for the United States and find a heterogeneous range of resilience across crops and risk dimensions. In addition, we provide a detailed look at the spatial correlations with the US and its historical trade partners and find evidence that these metrics could (potentially) be enhanced via strategic trade relationships. Research limitations/implications: Leveraging globally gridded temperature data, we estimate the metrics for the United States of America and China to demonstrate differences that might arise from a net-exporter versus net-importer perspective. Our results suggest that these metrics can be useful for disentangling the resilience a country faces between its own internal supply chain versus its participation in other countries’ supply chains. Practical implications: Since these metrics are a combination of exogenous spatial correlations of weather shocks and endogenous trade patterns, we also discuss how they can be adjusted via strategic trade relationships to enhance resiliency. Originality/value: Our results provide pertinent insights to US policymakers promoting export expansion under climate change (USDA FAS, 2024). Moreover, the metrics provided here are focused on climate resiliency and thus could be an important component of strategic trade decisions given the recent concerns between the US and Mexico centered around GM maize (Beckman et al., 2024) and the seemingly improving US–India agricultural trade relationship.