Food Security Outlook

Food security deteriorates due to high food and agricultural input prices

February 2022 to September 2022

February - May 2022

June - September 2022

IPC v3.0 Acute Food Insecurity Phase

1: Minimal
2: Stressed
3: Crisis
4: Emergency
5: Famine
Would likely be at least one phase worse without current or programmed humanitarian assistance
FEWS NET classification is IPC-compatible. IPC-compatible analysis follows key IPC protocols but does not necessarily reflect the consensus of national food security partners.

IPC v3.0 Acute Food Insecurity Phase

1: Minimal
2: Stressed
3: Crisis
4: Emergency
5: Famine
Would likely be at least one phase worse without current or programmed humanitarian assistance
FEWS NET classification is IPC-compatible. IPC-compatible analysis follows key IPC protocols but does not necessarily reflect the consensus of national food security partners.

IPC v3.0 Acute Food Insecurity Phase

1: Minimal
2: Stressed
3+: Crisis or higher
Would likely be at least one phase worse without
current or programmed humanitarian assistance
FEWS NET classification is IPC-compatible. IPC-compatible analysis follows key IPC protocols but does not necessarily reflect the consensus of national food security partners.
FEWS NET Remote Monitoring countries use a colored outline to represent the highest IPC classification in areas of concern.

IPC v3.0 Acute Food Insecurity Phase

Presence countries:
1: Minimal
2: Stressed
3: Crisis
4: Emergency
5: Famine
Remote monitoring
countries:
1: Minimal
2: Stressed
3+: Crisis or higher
Would likely be at least one phase worse without
current or programmed humanitarian assistance
FEWS NET Remote Monitoring countries use a colored outline to represent the highest IPC classification in areas of concern.

Key Messages

  • Poor households in the eastern and western parts of the Dry Corridor, as well as in areas affected by storms Eta and Iota, have started the year with atypical debts and no savings. In addition to losses in recent harvests, these households will be affected by below-average local employment in sporadic agricultural activities. They will therefore depend on market purchase for their food needs at a time when prices are high, reducing their purchasing power. To meet their food needs, they will reduce the quality and quantity of foods in their diet and employ negative coping strategies that will put their livelihoods at risk, resulting in Crisis (IPC Phase 3) outcomes.

  • Urban areas will experience Minimal (IPC Phase 1) outcomes throughout the outlook period, as the adjustment to the COVID-19 traffic-light alert system is expected to support economic recovery. Meanwhile, rural households will experience Stressed (IPC Phase 2) outcomes in the first half of this outlook period. Below-normal incomes, atypical debt, and high prices for food, transportation, and agricultural inputs will lead households to reduce the quality and quantity of their food. As the lean season progresses, they will be less able to access food; as a result, they will increasingly use negative coping strategies, and will be in Crisis (IPC Phase 3) from June onward.

  • Plantings for the primera season and the sole agricultural season in the Altiplano will benefit from the residual moisture of recent cold fronts, a favorable first rainy season, and an average canícula (a period of hot, dry weather). However, high agricultural input costs will lead to a reduction in their use and in total cropped area, negatively affecting production and associated agricultural activities. In addition, fuel prices will remain above average and are expected to impact the cost of food.

NATIONAL OVERVIEW

Current Situation

Between October and November, staple grain harvests from the postrera season were average, except in low- and medium-altitude areas in the east, where continuous dry conditions caused considerable damage and losses, especially among subsistence farmers. The only staple grain crop cycle in the western Altiplano concluded at the end of 2021 with average harvests. The start of 2022 has been marked by a slightly longer-than-average cold-front season. These cold fronts have caused below average and even freezing temperatures in parts of the western Altiplano, which have negatively affected vegetable planting. In addition, they have caused strong winds and excessive rainfall in the north of the country, resulting in flooding in localized areas of Alta Verapaz and Izabal and affecting the homes and crops of subsistence farmers. In the north of the country, postrera tardía (apante) season crops are developing well and it is expected that typical volumes of production will begin flowing to the markets by the end of February or beginning of March.

Currently, domestic markets are supplied with maize and beans from the postrera harvests, warehoused products, and formal and informal imports from Mexico. However, in line with the international trend, maize prices in January were significantly higher than the previous year and the five-year average. In January, the wholesale price of 100 kg of white maize at La Terminal market in the capital was 37 percent higher than in January 2021 and 41 percent higher than the five-year average. Likewise, in January, the price of 100 kg of black beans was 14 percent higher than the previous year and 29 percent higher than the five-year average. These price increases are driven by factors such as higher demand for local grain due to the high international price of maize, the high cost of agricultural inputs and freight transportation due to higher fuel prices, and some localized losses in the postrera bean harvest.

Fuel prices have also been increasing due to international trends as well as the country’s dependence on petroleum imports. In January 2022, diesel and regular gasoline prices were 33 and 30 percent higher than the five-year average, respectively. Propane gas — which is the second-most used energy source for household cooking — has been subsidized since December 2021. Nevertheless, in January 2022, prices were 14 percent higher compared to January 2020 and 11 percent higher than the five-year average. Similarly, fertilizer prices have increased continuously since the beginning of the year (Figure 1). National prices reflect international prices since Guatemala imports most of these inputs. In December 2021, the international price of urea was 293 percent higher than in 2019 and 255 percent higher than the five-year average.

The overall increase in prices is reflected in the Consumer Prices Index (CPI), which shows that, in 2020 and 2021, food and non-alcoholic beverages and transportation saw the biggest inflation. An increase of 8.7 percent in 2019–2020 and 3.1 percent in 2020–2021 was recorded for food and non-alcoholic beverages, while transportation prices increased by 9.9 percent from 2019 to 2020 and 7.4 percent from 2020 to 2021. Public transportation generally increased substantially, affecting all households. All types of transportation — urban and peri-urban — increased in price by between 50 and 100 percent during the pandemic due to changes in capacity, and prices have not yet returned to pre-pandemic levels. In January 2022, the main positive CPI contributions were fuels, oil, and maize, which have all been on an upward trend for some time. Since last year, in some areas of the country — for example, in Region III (Izabal, Zacapa, Chiquimula, and El Progreso) — firewood prices have increased by up to 29.6 percent.

In January, Guatemala was hit by a new wave of COVID-19 infections, predominantly with the Omicron variant. However, despite the increase in cases, continued restrictions on gatherings and social distancing, and slow progress on vaccination, the country's economy continues to recover. On February 11, 2022, adjustments to the COVID-19 alert system were published, updating the criteria and reducing the restrictions at each alert level. According to data published in January 2022 by the Bank of Guatemala (BANGUAT), the Monthly Index of Economic Activity (IMAE) continued to grow in December 2021. For the third quarter of 2021, Gross Domestic Product grew year on year by 8.6 percent. Activity in the accommodation and food service sectors are continuing to recover following their decline in 2020. However, the sums generated by this activity in local currency (GTQ) in the first three quarters of 2020 and 2021 are 25 percent and 15 percent lower, respectively, than those generated in the first three quarters of 2019, which shows how slowly these important sectors are recovering.

Local domestic tourism also continued to recover in December, particularly thanks to end-of-year holidays and vacations. However, according to the Guatemalan Tourism Institute (INGUAT), at the end of 2021 both the number of foreign visitors arriving in the country and hotel stays remained below 2019 levels, with a reduction of about 75 percent and 50 percent, respectively.

Although economic activities are recovering and prices continue to rise, average monthly incomes have declined. According to the latest National Employment and Income Survey (2021), the average monthly income for 2021 was 9.1 percent lower than in 2019, the year of the previous survey, falling from 2,429 GTQ (316 USD) to 2,207 GTQ (287 USD). By occupational category, those employed in private households have the lowest average monthly income with 993 GTQ (129 USD), followed by day laborers with 1,158 GTQ (151 USD), own-account agricultural workers with 1,579 GTQ (205 USD), and non-agricultural own-account workers with 1,622 GTQ (211 USD).

In rural areas, the peak demand period for seasonal agricultural labor was normal, in a context of high transportation costs, both at the national level and in Mexico and Honduras where households tend to migrate for work. Coffee and cardamom are two of the country's biggest exports, and at the rural level, their harvest is one of the main sources of employment for seasonal workers. In 2021, coffee exports generated 42.2 percent more foreign exchange compared to 2020, thanks to better international prices. In contrast, cardamom exports were down 54.1 percent, due to a lower sale price and a 12 percent decrease in the volume exported. While favorable coffee prices have allowed for stability in labor demand and pay, cardamom’s low purchase price has impacted producers, and therefore day laborers who depend on this seasonal work, since they have been paid less per pound than in 2020. The current high transportation costs hinder agricultural workers’ mobilization, as their daily wage does not cover them. However, for those who migrate seasonally, either within or outside Guatemala, transportation costs have not impeded travel as these costs represent a small fraction of their final profit, especially since these workers spend long periods at their destination and travel costs are sometimes covered by their employer or organized within the community of workers.

However, when migration seasons end and workers have to seek local employment back home, transportation costs weigh heavily on household expenses, sometimes exceeding, or coming just below, the daily wage (30–40 GTQ per day, equivalent to 3.90–5.19 USD per day).

During the pandemic, urban and rural households have taken on and accumulated debt as a coping strategy; this debt has grown as incomes and jobs affected by the pandemic remain below pre-pandemic levels. Data from the Guatemalan Superintendency of Banks (SIB) show the increase in the number of consumer loans since November 2020 (Figure 2). This type of loan is commonly requested by households to meet a need in the home. Although it is only taken by individuals who are part of the banking system, its prevalence can still reflect the overall situation of households at the national level. In January 2022, the number of consumer loans increased by 13 percent from 2021 and 22 percent from 2019. Larger sums are being requested, having been on an upward trend in the last two years, with smaller loans (of the first category: up to 50,000 GTQ, equivalent to 6,494 USD) and fiduciary loans showing the greatest increase.

In 2021, an all-time record was set for remittances in five months of the year, and for the annual cumulative figure, which was 35 percent higher than the previous year and 64.5 percent higher than the five-year average. In January 2021, remittances increased by 30 percent from January 2020 and were 62 percent higher than the five-year average. Although poor households are generally not recipients of remittances, remittances have helped to sustain middle-income and better off households’ consumption, which, by their purchase of products and services, contributes to the dynamism of the local economy. According to Central American Business Intelligence data for 2021, the reasons for sending remittances include family-related expenses (54.9 percent), savings (17.4 percent), construction (12.8 percent), economic and family support (8.3 percent), loans (4.0 percent), and health (1.7 percent).

Detentions and deportations of Guatemalan migrants from the United States and Mexico continued throughout 2021. According to data from the International Organization for Migration, at the end of 2021, 63,808 people had been sent back, which is 39.9 percent more than in 2020, but 41 percent less than in 2019. In 2021, most were sent back from Mexico, at the start of their journey to the United States. Between 2017 and 2021, 380,104 people were sent back to Guatemala, while in 2020 and 2021, Huehuetenango was the department with the most receiving municipalities. All those sent back see their household income affected since to pay for the trip, they incur loans, mortgaging their land, homes, or businesses, to be paid back with the remittance they expect to receive.

As at the sixth week of the year (February 6–12), the Ministry of Health’s Department of Epidemiology has reported a cumulative total of 3,230 cases of acute malnutrition in children under five years of age and a rate of 17.2 per 10,000 inhabitants. The department with the highest number of cases is Escuintla with 367, followed by Alta Verapaz with 352 cases, and rates of 46.6 and 20.8 respectively, although both departments report fewer cases and lower rates than last year. The health zones with a higher rate than the national average and which currently have a higher rate than in the same period of 2021 are Chiquimula, Suchitepéquez, Sacatepéquez, Guatemala Nor-Oriente, Guatemala Sur, El Progreso, Quetzaltenango, and Santa Rosa.

For February 2022, Save the Children, Catholic Relief Services, Plan International, Action Against Hunger, Food for the Hungry, WFP, International Federation of Red Cross and Red Crescent Societies, and Global Communities have planned cash transfers for 30,639 families in 55 municipalities, in the departments of Quiché, Alta Verapaz, Huehuetenango, Totonicapán, Suchitepéquez, Quetzaltenango, and Chiquimula. These resources come from the USAID Bureau for Humanitarian Assistance and the organizations' own funds. Household coverage by municipality varies, but in Huehuetenango only four municipalities have coverage over 25 percent. The sums transferred would allow households to meet 50 percent or more of their caloric needs. In addition, the government runs a school feeding program, under which the daily allowance per child has been increased from 4 GTQ to 6 GTQ this year, to cover food for children attending public education establishments at the pre-primary and primary levels. How this assistance is delivered to each child will depend on when on-site classes resume. If on-site classes cannot be resumed, the food will be delivered to the parents on a regular basis.

Given the recent conflict in Ukraine and the sanctions imposed on Russia, global grain and fertilizer exports could be disrupted. The likely magnitude of these disruptions is being analyzed as events in Ukraine unfold. Potential impacts are detailed in the section on events that might change the outlook.

Current food security outcomes

Economic reactivation has continued and there have been no setbacks due to COVID-19-related restrictions, despite the increase in cases at the beginning of the year. Trade and export activities had a good year in 2021, which helped to bring back jobs in urban and rural areas. All economic sectors are already reporting a near-full recovery to pre-pandemic figures, with the exception of the services sector and tourism, where activity remains below 2019 levels. In both urban and rural areas, households have experienced falling average wages and rising debts. Thanks to the dynamics generated by the reactivation of the economy, the demand for services and products, and the return of jobs, the country's urban areas are experiencing Minimal (IPC Phase 1) outcomes.

In rural areas, staple grain harvests and the peak demand for agricultural labor have improved the food security situation of poor households in most regions of the country. However, due to high transportation and food costs, and debt repayment, these households have been unable to save money, replenish their food reserves, or avoid using negative coping strategies. These households continue to reduce the quality and quantity of food in their diet and resort to strategies such as relying on help from family or friends, borrowing money, buying food on credit, or cutting back on health expenditures, resulting in their classification of Stressed (IPC Phase 2).

While demand for seasonal agricultural workers to harvest coffee and cardamom has been stable both nationally and in Honduras and Mexico, earnings have been below average. This decrease is a result of high transportation costs, which limit local workers’ ability to travel to work each day, and low international cardamom prices, which have led to a pay cut for the pickers. As was the case last year, this year poor households located in the eastern Dry Corridor will have to resort to purchasing staple grains earlier in the year than usual and at above-average prices. These households lost their crops during both the primera and postrera seasons, so they are starting the year with no reserves or savings, but with debt. They are therefore forced to depend on the market to obtain staple foods, sold at increasingly higher prices, and they have limited purchasing power due to the rapid depletion of their newly received income. Households in the lowland areas in the west that are part of the Dry Corridor, and in the areas affected by storms Eta and Iota in Alta Verapaz and Izabal, face the same situation. In the latter areas, households have not yet recovered from the storms’ impact on their livelihoods. In addition to obtaining below-average staple grain harvests because the soil is still damaged, poor households have seen their incomes decrease due to low daily wages for picking cardamom. Cardamom and coffee are the two main products that create temporary agricultural employment in the area. These households will continue to make increasingly severe adjustments to the amount of food for each household member and will use livelihood coping strategies such as atypical migration, sale of reproductive animals and productive assets, and/or seed consumption, resulting in their facing Crisis (IPC Phase 3) outcomes.

National-level Assumptions

The outlook for February to September 2022 is based on the following national-level assumptions:

  • The La Niña phenomenon will continue in the first half of this outlook period, until May 2022, which coincides with the primera season. It is expected to result in average rainfall overall and above-average rainfall in the Pacific Basin.
  • The cold-front season will end in March and, until then, is expected to bring below-average temperatures, mainly in the Western Highlands, and above-average rainfall in the north and Caribbean.
  • The canícula is expected to occur at the usual time, between July and August, and at an average intensity.
  • It is expected that the staple grains for the primera season and the sole growing season in the Altiplano will be planted on time, but with smaller than usual cropped area due to the high costs of agricultural inputs.
  • Primera staple grain harvests are expected to be slightly below average at national level due to reduced planting areas or low yields where agricultural inputs have not been used.
  • The second rainy season (August–October) is likely to be normal; postrera planting will therefore be done at normal times, but with small than usual cropped area due to the high cost of agricultural inputs.
  • Both wholesale and retail (municipal) markets nationwide are expected to remain well stocked and operating normally.
  • White maize and bean prices are likely to remain around 30 percent and 25 percent above the five-year average, respectively.
  • Prices of agricultural inputs, fuel, transportation, propane gas, and firewood are expected to remain above the five-year average.
  • It is likely that COVID-19 restrictions will continue to follow the current traffic-light alert system throughout this outlook period. However, the alert ranges established by the new system should allow for increased capacity by reducing social distancing, thus enabling sectors related to personal services, food, sports, and entertainment to be reactivated sooner.
  • In rural areas, low vaccination rates and high infection rates could continue to affect the reactivation of the economy’s formal and informal service and commercial sectors, as well as international tourism.
  • Both local tourism and the number of foreign visitors are expected to increase in the coming months, although the latter is unlikely to reach pre-pandemic levels. This is due in part to the low local vaccination rate, and to changes in spending and saving patterns, as well as restrictions, at the international level.
  • Income from non-agricultural work and informal occupations is expected to improve slightly compared to last year but remain below normal levels due to fewer days of work, more part-time rather than full-time work, or lower pay per day worked.
  • Beginning in March, daily labor demand for sporadic seasonal activities such as cleaning, planting, maintenance, and harvesting, particularly of staple grains, is likely to be below average, as growers may reduce their cropped area and have less hiring capacity due to higher fertilizer costs.
  • Remittances are expected to continue their upward trend, remaining above average.
  • Throughout this outlook period, high transportation costs are likely to continue to significantly affect commuting to formal, informal, temporary agricultural, and migrant jobs, as well as the cost of transporting food from production areas to markets.
  • Debt among poor households will remain above normal as they have continued to incur debt, rapidly using new income to pay off earlier debts and meet high food and transportation costs. Households in the Dry Corridor and the Altiplano are likely to be the most affected.

Most Likely Food Security Outcomes

Despite a slightly longer-than-usual cold-front season, it is expected that by March, postrera tardía season crops will begin to flow to the markets. An average first rainy season and a normal canícula in terms of duration and intensity are likely to allow primera and Altiplano planting to be done at the usual times (Figure 3). However, agricultural input price increases of up to 200 percent over the five-year average, could mean a reduction in cropped area since producers, especially small and medium-sized ones, will not be able to cover the cost of production. Higher prices would also lead to lower incomes due to below-average hiring of local labor for sporadic planting and maintenance jobs, which usually provide employment for poor households from March or April.

Markets will remain stocked up, but prices will remain above the five-year average. In general, the prices of various food products will remain high due to various factors such as the increase in international prices of raw materials, agricultural inputs, fuel, and freight transportation costs. Likewise, the above-average price of public or private transportation is expected to continue to affect people’s ability to travel to markets, places of work, or to seek employment.

Income from non-agricultural work and informal jobs will see a slight improvement from 2021 but will remain below normal due to reduced availability of full-time employment or reduced pay. Throughout the outlook period, urban areas are expected to remain in Minimal (IPC Phase 1) food insecurity as they benefit from the reactivation of the various economic sectors.

Until May 2022, rural households will consume their most recent staple grain harvests and use their new income to pay off debt and buy food. However, due to lower-than-normal income and higher-than-normal debt, households will begin to make adjustments to the quality and quantity of food for daily consumption, increasingly sacrificing dietary diversity and relying mainly on staple grains, sugar, and oils. Households will also continue to use negative coping strategies such as asking relatives for help, incurring new debt to buy food, reducing health and education expenses, and collecting more firewood and wild foods to sell, putting them in Stressed (IPC Phase 2) conditions.

The peak of the lean season will start from June, at which point households will rely more on the market and buy more food on credit. This year, not only are food prices higher than average, but also income from employment will be lower than usual, mostly due to the reduction in cropped area, caused by the high cost of agricultural inputs. Households will no longer eat diverse diets as they will have to limit their purchases to staple foods such as maize and beans. They will also have to reduce portion sizes and limit family members’ food consumption. In addition to remaining in debt, they will employ crisis livelihood coping strategies such as atypical migration, and sale of reproductive animals and productive assets to meet minimum food needs, putting them in Crisis (IPC Phase 3).

Poor households located in eastern and western parts of the Dry Corridor, and in the northern areas of the country affected by storms Eta and Iota, will face the same problems as rural households. Moreover, they suffered various shocks in 2021, such as reduced or lost harvests and loss of livelihoods due to very low income. For these households, the lean season will start earlier than usual, and they will continue incurring new debt to buy food and reducing their daily food consumption, limiting themselves to a basic diet and reducing portion sizes. They will also continue to employ crisis coping strategies, the use of which has prevented them from recovering livelihoods lost in recent years. These households will be in Crisis (IPC Phase 3) throughout the outlook period. Poor households that depend on local tourism, particularly around Lake Atitlán, will also be in Crisis given the slow recovery of tourism-related income sources.

Events that Might Change The Outlook

Possible events over the next eight months that could change the most-likely scenario.

Area Event Impact on food security outcomes
National An above- or below-average first rainy season (between May and July)  Above-average rainfall could cause a delay in planting due to excess moisture. Above- or below-average rainfall could affect crops in early development and result in below-average yields, leaving households with lower harvests than usual and putting them in either Stressed (IPC Phase 2) or Crisis (IPC Phase 3) conditions.
National An unusually intense and prolonged canícula This would affect crop development and result in below-average yields, leaving households with smaller harvests than usual. This would put households in Stressed (IPC Phase 2) or Crisis (IPC Phase 3) conditions.
National Bigger-than-expected increases in food prices, particularly for staple grains This would reduce households' ability to purchase staple foods and worsen household food security, putting more people in Stressed (IPC Phase 2) or Crisis (IPC Phase 3) conditions. 
National Less Mexican maize entering the country  This could result in higher grain prices and poor households being unable to buy enough to meet their basic food needs. This would worsen outcomes and put more people in Stressed (IPC Phase 2) or Crisis (IPC Phase 3) conditions.
National

Higher-than-expected prices for food — particularly maize, wheat, and oils — petroleum, and fertilizer as a result of the Russia–Ukraine conflict

High petroleum and food prices would reduce households' ability to purchase staple foods, while higher fertilizer prices would render fertilizer and other agricultural inputs needed for crops inaccessible, reducing production and availability. Household food security would deteriorate, putting more people in Stressed (IPC Phase 2) or Crisis (IPC Phase 3) conditions.

 

About Scenario Development

To project food security outcomes, FEWS NET develops a set of assumptions about likely events, their effects, and the probable responses of various actors. FEWS NET analyzes these assumptions in the context of current conditions and local livelihoods to arrive at a most likely scenario for the coming eight months. Learn more here.

About FEWS NET

The Famine Early Warning Systems Network is a leading provider of early warning and analysis on food insecurity. Created by USAID in 1985 to help decision-makers plan for humanitarian crises, FEWS NET provides evidence-based analysis on approximately 30 countries. Implementing team members include NASA, NOAA, USDA, USGS, and CHC-UCSB, along with Chemonics International Inc. and Kimetrica.
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