Ceres, a Boston-based nonprofit network of investors, companies and public interest groups, focused in its report on climate change's effect on corn production. It said farmers and the companies they supply must deal with drought and other weather extremes, an increase in groundwater depleting irrigation, and more fertilizer use.
"Climate change and pressures on water supplies pose financial risk to our agricultural industry but it's not just the corn belt's problem," said Brooke Barton, water program director at Ceres and co-author of the report, which argues that increased corn production has depleted land and water resources in some areas and contributed to increased water pollution from fertilizer runoff.
"Companies that depend on U.S. corn have a big role to play in sending market signals that these issues matter," she said.
Food giants working with Ceres include General Mills and Unilever, both of which have adopted sustainability programs suggested by the organization that set specific goals for suppliers and farmers.
The report calls for the establishment of corporate policies for goals to reduce the environmental impact, procurement contracts that require sustainably grown crops, and efforts to identify areas of high water stress, groundwater pollution and overuse of fertilizer.
Ceres also recommends that companies substitute other grains for corn where environmental benefits are well demonstrated, and disclose to investors the company's exposure to climate and water-related risks in its agricultural supply chain.
General Mills, the maker of Cheerios, Wheaties and Green Giant vegetables, increasingly has been involved in providing money and support to improve the use of water and fertilizer since it began a sustainability program in 2005.
In the Root River region of southeastern Minnesota, the company contributed $300,000 to help vegetable farmers incorporate new conservation practices to reduce erosion into the river.
In Irapuato, Mexico, General Mills provided interest-free loans to farmers to help them invest in drip irrigation equipment to grow Green Giant vegetables, saving more than 1 billion gallons of water a year, the company said.
Corporations are taking on the additional expense to ensure future supplies, but also because of customer demand, said Jerry Lynch, chief sustainability officer for General Mills.
"More and more consumers are looking at what companies are doing in this area because that really demonstrates the care that a company takes with the ingredients which are the thing that a consumer cares most about in a food product," Lynch said.
Unilever, which makes products including Lipton tea and Hellmann's mayonnaise, is working with Iowa soybean farmers on a project to use a newly developed calculator that measures fertilizer use, water quality, energy use, and greenhouse gas emissions. Soybean oil is a major ingredient in mayonnaise.
Farmers committed 44,000 acres to the project in 2013 and that rose to 150,000 acres this year, said Jonathan Atwood, the company's vice president of sustainable living.
"The intent is to go on-farm and try and find a collection of like-minded farmers to come in and begin to measure at a much deeper level against some of the sustainability targets we have as a company," he said.
Unilever has set a goal of 100 percent sustainably sourced commodities by 2020. Atwood said the company began at 12 percent in 2010 and achieved 48 percent globally this year.
Ray Gaesser, who farms 6,000 acres of corn and soybeans in southwest Iowa near Corning, uses no-till farming, terraces on sloping land to prevent soil erosion, and has grass waterways to slow water runoff. The farm is testing cover crops that help hold the soil in place and retain nutrients.
Most farmers, he said, are willing to adopt new measures if they are shown to be beneficial to the land and water and do not reduce productivity.
"They want to be sure it's being done for more than just marketing reasons or to position a company to be in a better light with their consumers," Gaesser said. "It needs to be a sincere effort."