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![]() Nov. 11, 2024
By Daniel Munch, Economist, American Farm Bureau Federation Weather-related production risks are unavoidable on the farm or ranch. From heavy rain and hail to snow, high winds and drought, farm families prepare their land, plant and harvest each season, fully aware that their livelihoods depend on local weather conditions. In 2024, severe weather has taken center stage, with recovery from hurricanes Helene and Milton just beginning. These powerful storms have been accompanied by hurricanes Debby, Beryl and Francine, relentless wildfires across Texas and New Mexico, and waves of hailstorms, tornadoes and other extreme weather, making this year a challenging one for many communities. While the scale of 2024 losses is still being tallied, it's critical to remember that the financial impacts of recent years' disasters continue to burden farmers. Crop insurance is an invaluable tool, covering more than 50% of weather-related crop losses in recent years, but its coverage has limitations, with policies not available for all crop types in every region. In this Market Intel report "uncovered loss" refers to crop losses that were not insured through crop insurance, existed outside policies' coverage levels, or did not qualify under an existing risk management program. To date, only one third of 2022 uncovered losses from natural disasters have been addressed through ad hoc relief programs, and uncovered losses from 2023 and 2024 are still unaddressed. As farm economic conditions worsen and natural disasters mount, timely disaster assistance is crucial to protect farmers, ranchers and the rural communities they sustain from lasting harm. Farmers Still Waiting for Disaster Assistance According to the National Oceanic and Atmospheric Administration (NOAA), in 2022, there were 18 weather disasters with total economic damage over $1 billion dollars each. This included widespread drought in the West; hurricanes Ian, Fiona and Nicole; derechos; tornadoes and others. NOAA reported that 2022's $165 billion in total economic losses surpassed 2021 as the third-costliest disaster year in history, behind only 2017's $346 billion and 2005's $244 billion. Farm Bureau calculations put total crop and rangeland losses from major 2022 disasters at over $21.48 billion, or 7.7% of NOAA's total economic impact figure. Of that figure, over $10.48 billion in losses were uncovered losses. On Dec. 29, 2022, President Biden signed the Disaster Relief Supplemental Appropriations Act, which authorized $3.74 billion for producers who suffered losses to crops, trees, bushes and vines from qualifying causes occurring in calendar year 2022. However, this support covers only 36% of the total uncovered losses farmers faced from major weather events that year, leaving a substantial $6.74 billion gap that has yet to be made whole two years later. In 2023, 28 weather disasters with damages exceeding $1 billion struck the U.S. coast-to-coast. NOAA reported that 2023 ranked ninth in terms of the total inflation-adjusted economic impact of these events, with industries across the economy experiencing an estimated $92.9 billion hit. Key events included extreme drought along the Gulf Coast, hurricanes Hilary and Idalia, the Hawaiian firestorm and severe Northeast flooding. Farm Bureau estimates indicate that crop and rangeland losses from these 2023 events exceeded $21.94 billion, representing 23.6% of NOAA's total economic impact. Nearly $10 billion of these losses were uncovered. While assessments of 2024's natural disasters are ongoing, preliminary Farm Bureau estimates project billions more in agricultural losses. Early estimates following the same methodology as previous analyses that exclude the recent impacts of Hurricanes Helene and Milton as well as North Dakota fires, indicate uncovered crop and rangeland losses exceeding $4.1 billion. (Losses from Helene and Milton will be billions more.) Since 2022, farmers and ranchers are facing a cumulative minimum $20 billion loss in crops alone that has not been addressed with ad-hoc relief. These continued losses are severely impacting balance sheets and straining farmers' financial stability. This $20 billion cumulative loss figure does not include the additional billions in losses to livestock, timber and infrastructure also impacting farmers and ranchers nationwide. To read entire report, Click Here. Tweet |
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