The effects of the vast drought afflicting AmericaÂ’s farm belt are rippling across the economy. Major companies apparently feeling the heat from rising crop prices include
McDonaldÂ’s, Smithfield Foods and Arthur Daniels Midland, which processes agricultural commodities.
More than half of the nation’s pasture and rangeland is now plagued by drought – the largest natural disaster area in U.S. history. And with
corn prices soaring as
crops wither, other sectors are nervously watching the weather forecasts and assessing potential impacts on their business. For example:
The Climate Connection
But perhaps the most sobering implication of this agricultural crisis is what it heralds for the long-term health of our economy.
Unlike
the reaction to the recent searing heat wave, the mainstream media has largely ignored a possible climate connection to AmericaÂ’s
worst drought since 1956. While this particular drought could turn out to be due to several factors, (
such as a second winter of La Niña), we know the afflicted region will look increasingly as it does today in a warmer world
(...)
We need only look back to last year to see how the cumulative economic costs can mount.
Droughts, floods, hurricanes and other extreme weather cost the U.S. economy at least
$55 billion in 2011, according to NOAA, with 14 separate events exceeding $1 billion. The
devastating drought and associated wildfires in Texas and Oklahoma alone cost American crop farmers $7.6 billion and the cotton and cattle industries around $5.4 billion.
Companies are not unaware of these looming dangers and how a changing climate could compromise their operations. A 2011
survey of 72 major corporations, for the UN Global Compact (with technical support from WRI) found that 83 percent believed climate change impacts posed a risk to their products or services...