Food Companies Face Water Risk

May 9, 2015

America’s biggest food production companies face a growing threat of water scarcity, according to a new report from Ceres, an environmental sustainability group.

The report cites pollution as one of the primary culprits.

Farming can be a major contributor to water pollution through runoff from chemicals and manure. Because food companies depend on clean water, they have an incentive to help farmers keep water in mind.

But Brooke Barton, co-author of the report, said two-thirds of the companies assessed aren’t even engaging farmers on this issue.

“A lot of the food companies are frankly asleep at the wheel,” Barton said. “Many have not even begun to look at the water impacts associated with the farmers, the dairies, and the ranches that they source from.”

Some companies are working with producers. Unilever, the producer of Hellmann’s mayonnaise, is paying their Iowa soybean farmers ten cents a bushel to adopt sustainable water practices, Barton said.

As water supplies risk becoming increasingly depleted and polluted in major agricultural growing regions, traditional risk management approaches - like geographic diversification – are less effective.

“There’s not a lot of growing area left and we are pushing up against the limits of available water supply,” Barton said. “So, this is a time to invest in the supply chain. To invest in watersheds and in agriculture. Not a time to run and hide.”

The report cites drought, aquifer depletion, and competition from cities as additional reasons for water worries.

Many food companies have already seen their bottom line take a hit because of drought.

Cargill, one of the world’s major pork and beef companies, reported a 12 percent drop in profits in the last quarter of 2014 because of damage to pastures used to raise beef in the southwest.