Water risks pose a growing threat to the food sector, and they are causing real financial damage for companies. Glencore Plc and Bunge Ltd., for example, have seen their oilseed profits shrink due to a prolonged drought in Canada that is reducing yields. Dairy farmers in California are struggling with increasing feed costs due in part to the severe mega-drought in the state that began in 2012. And just last year, Cargill reported a 12 percent drop in 2014 fourth-quarter profits as a four-year drought in the U.S. Southwest withered pastures used to raise beef.
Agriculture uses 70 percent of the 1 percent of available freshwater on earth, and the bulk of this water is used in the agricultural supply chain (i.e., feed grain and other inputs). Key drivers are increasingly constraining already limited supplies. Currently, one-third of the world’s food is produced in areas of high or extremely high water stress or competition. This is due to a confluence of factors including: a g