The first-mile risk blind spot

Volatility starts where visibility is weakest

Global supply chains are experiencing increasing volatility in the availability of key commodities. Coffee is one recent example: prices have seen the steepest year-on-year rise in decades, driven largely by extreme weather in sourcing regions. But coffee is only one indicator of a much larger structural issue.

Wheat, palm oil, cocoa, beef and wood all display similar patterns. Weather and climate events, unsustainable land management and shifting land use create unpredictable production shocks that ripple through global markets. These shocks drive price volatility, compliance pressure and reputational risk — yet most remain undetected until they are fully materialized.

The severity of these issues come back to a consistent issue - a lack of visibility. Roughly 60% of operational costs and risks occur within the first mile of the supply chain — where the least transparent conditions exist. Businesses have spent decades building visibility across procurement, logistics and distribution – but these places of origin remain a blind spot.

This is where the foundation of risk management must shift.

The anatomy of first-mile risk

Commodity production is hyper-local. So is risk. Every sourcing region contains unique “risk vectors” — conditions that determine yield, resilience and long-term viability.

Treefera’s analysis and field data confirm that three variables dominate first-mile volatility across nature-based commodities:

• Weather and climate – Increasing temperature, extreme weather events, drought and precipitation variability, disease and pest incidents are leading causes of yield decline and production instability.
• Agricultural practice – Aggressive, taxing, high-input practices can bump yield in the short term but have have deleterious long-term impacts on soil health and thus productivity
• Land-use change – Encroachment and deforestation reduce both productive capacity and compliance eligibility, while increasing exposure to regulatory penalties.

Each commodity behaves differently under these pressures. For beef, yield and price are directly tied to rainfall and pasture conditions. Rubber’s production risk is less climatic and more structural — driven by deforestation and overcapacity. These distinctions matter, because managing “commodity risk” without understanding its local composition is no longer viable. When most of a commodity’s production is concentrated in one region, like cocoa in West Africa, even a localized disruption can ripple through the entire industry.

Seeing what the market has missed

For decades, the data needed to manage first-mile risk simply didn’t exist. We could see prices, but not production. We could infer the cause, but not prove it. That’s changing. We now have the ability to measure what’s happening in sourcing regions in close to real time.

The work we’re doing at Treefera brings together multiple streams of information – satellite imagery, land records, and weather and climate data – and lets AI make sense of it all. Instead of pulling partial reports once a year, we can now show week by week how yield is shaping up across different regions. We can see where conditions are improving or deteriorating and, critically, why.

When we can isolate the driver – whether it’s drought, poor soil practice or land conversion – we move from assumption to evidence. We don’t need to argue about whether climate is affecting price; the data shows it. And once that becomes self-evident, capital will move toward the regions and practices that perform better under stress.

That is the shift underway now: not more data for its own sake, but the ability to unify and interpret it so that producers, buyers, investors, insurers and governments can all operate from the same set of observable facts.

The path forward

First-mile visibility enables a structural change in how risk is managed. When organizations can observe production, attribute risk and forecast yield at source, they can shift from reactive management to preventative strategy.

For Treefera, this is the foundation of resilience. By building a unified data fabric that integrates satellite, environmental, and regulatory data, we provide the defensible intelligence needed to manage risk in real time.

This is the beginning of a new era of risk management — one that operates with the precision of financial markets and with visibility across global production systems.