Eyjafjallajokull! The eruption this year of an unpronounceable volcano in Iceland was a reminder of the unpredictable nature of volcanoes and the effect they can have on the world economy. The eruption turned out to be relatively small and the greatest effect was the turmoil caused in the airline industry. Nevertheless, it is important to be prepared for larger volcanoes that can seriously affect world grain production.
Volcanoes can ruin a grain harvest by sending so much ash into the upper reaches of the atmosphere that the surface temperature is reduced. Eruptions with global consequences for grain production have happened in the past and will undoubtedly happen in the future. Volcanoes that affected grain production in the past include the Laki eruption in 1783 and the Tambora eruption in 1815. More recently, the Pinatubo eruption in 1991 reduced world grain production.
The most notable example of a volcano with the power to disrupt the world grain harvest was that of Tambora in 1815. Tambora is a volcano in Indonesia that had a cataclysmic eruption in April of 1815. It is estimated that 160 cubic kilometers of material was ejected from the volcano in the largest eruption in recorded history. The eruption created global climate changes that included the “year without a summer” because of the effect on North American and European weather.
In the spring and summer of 1816, a persistent dry fog was observed in Europe and the United States. The fog reddened and dimmed the sunlight and neither wind nor rainfall dispersed the "fog." The fog was a stratospheric sulfate aerosol created by the volcano. On June 6th, snow fell in Albany, N.Y. In Canada, snow 12 inches deep accumulated near Quebec City on June 10th. Cold conditions occurred for months and ruined agricultural crops all across the northern hemisphere. It is estimated that 100,000 people died in Ireland alone. It was the worst famine of the 19th century.
The failed harvest had a predictable effect on grain prices. In 1816, the price of oats in the United States rose from 12 to 92 cents a bushel. In current dollars that is a rise from $1.50 to $11.47. Oats were, of course, a necessary staple for an economy dependent on horses for primary transportation. Remote areas lacking in food had to pay dearly for both foodstuffs and for the transportation of foods as well.
Another Icelandic eruption was the Laki volcano of 1793. The dust thrown into the air cooled the earth dramatically and the effect lasted for years. In the winter of 1783-84 the Mississippi froze as far south as New Orleans and there was ice in the Gulf of Mexico. Tens of thousands died of famine in Europe. Ships couldn’t sail because the volcanic induced fog was so thick. The poverty and hardships caused by years of extreme weather was one of the contributing factors that led to the French Revolution.
A more recent eruption is the one at Mount Pinatubo in the Philippines in 1991, the largest volcanic eruption in living memory. Just like Tambora, Pinatubo created a global layer of sulfuric acid haze. Global temperatures dropped, crops were smaller than expected and the price of grain rose. The most notable effect was on the price of wheat which rose from $2.50 per bushel to $4.00 per bushel as a result of the eruption. Altogether, the total world crop of grain was reduced by about 5%.
Watch out for Katla
What about Eyjafjallajokull? Experts say that it is probably not a serious problem for grain production. A more serious problem is that a nearby, potentially more dangerous volcano, Katla may erupt. Katla erupts nearly every time that Eyjafjallajokull does in a two hundred year cycle. The combination of the two volcanoes could result in a significant decline in world agricultural production for a year or two. So far, Katla is quiet, but scientists are keeping a close eye on it. If the headlines suddenly start talking about an eruption of Katla in the next few months, it would then be prudent to load up on grain futures. An eruption of Katla (or any other major volcano around the world) in 2010 would reduce harvests in 2011.