By Julia Shanahan | October 18th, 2019
The FED central bank released a report this week reviewing the economic strength of various sectors and regions and concluded the agriculture industry is still not doing well economically — a lot of which can be attributed to climate change.
The report said that adverse weather effects has impacted farming conditions, market prices, and has disrupted trade. The Midwest has been hit particularly hard, and the FED reported that midwest sources have concerns about the outcome of this year’s harvest. Iowa experienced heavy flooding in the spring, which damaged grain and farmland. Because Iowa also experienced a period of dry weather over the summer months, some farmers were able to bounce back.
This summer, economic experts at the USDA issued a report that said increasing crop losses will drive up the prices of crop insurance, with climate change being a leading factor in crop loss. There are several government cost-share programs that work to mitigate risk in agriculture, and the average annual cost of these programs amounts to $12 billion using data from the last decade. As severe weather becomes more frequent, the amount of federal dollars is expected to increase.
The report says that all anticipated climate scenarios are expected to lower yields of corn, soybeans, and wheat — but yield volatility is not always impacted by severe weather. In a scenario that greenhouse gas emissions increase at a high rate, the cost of today’s Federal Crop Insurance Program is expected to increase 22 percent.