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Estimating the Impact of Drought on Agriculture Using the U.S. Drought Monitor

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  • Yusuke Kuwayama
  • Alexandra Thompson
  • Richard Bernknopf
  • Benjamin Zaitchik
  • Peter Vail

Abstract

We estimate the impacts of drought, as defined by the U.S. Drought Monitor (USDM), on crop yields and farm income in the United States during the 2001–2013 time period. Our empirical strategy relies on panel data models with fixed effects that exploit spatial and temporal variability in drought conditions and agricultural outcomes at the county level. We find negative and statistically significant effects of drought on crop yields equal to reductions in the range of 0.1% to 1.2% for corn and soybean yields for each additional week of drought in dryland counties, and 0.1% to 0.5% in irrigated counties. Region-specific results vary, with some regions experiencing no yield impacts from drought, while yield reductions as high as 8.0% are observed in dryland counties in the Midwest for every additional week of drought in the highest USDM severity category. Despite this impact on crop yields, we find that additional weeks of drought have little to no effect on measures of farm income. While precipitation and temperature explain most of the variability in crop yields, we find that the USDM captures additional negative impacts of drought on yields.

Suggested Citation

  • Yusuke Kuwayama & Alexandra Thompson & Richard Bernknopf & Benjamin Zaitchik & Peter Vail, 2019. "Estimating the Impact of Drought on Agriculture Using the U.S. Drought Monitor," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(1), pages 193-210.
    • Handle: RePEc:oup:ajagec:v:101:y:2019:i:1:p:193-210.
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    File URL: http://hdl.handle.net/10.1093/ajae/aay037
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    Citations

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    Cited by:

    1. Cortney Cowley & Jacob Dice & David Rodziewicz, 2023. "Drought and Cattle: Implications for Ranchers," Research Working Paper RWP 23-06, Federal Reserve Bank of Kansas City.
    2. Dhakal, Aayush Raj & Etienne, Xiaoli L. & Trujillo-Barrera, Andres A., 2022. "Effect of Drought on Spring Wheat Prices in Northern United States," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322285, Agricultural and Applied Economics Association.
    3. Jarrett, Uchechukwu & Miller, Steve & Mohtadi, Hamid, 2023. "Dry spells and global crop production: A multi-stressor and multi-timescale analysis," Ecological Economics, Elsevier, vol. 203(C).
    4. Ashish Sharma & Subir Sen, 2022. "Droughts risk management strategies and determinants of preparedness: insights from Madhya Pradesh, India," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 114(2), pages 2243-2281, November.
    5. Queiroz, Pedro & Mariano, Denis, 2020. "The effect of remote sensing drought indicators on agricultural yield: Evidence from Southern Brazil," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304557, Agricultural and Applied Economics Association.
    6. Cécile Couharde & Rémi Generoso, 2023. "The financial cost of stabilizing US farm income under climate change," EconomiX Working Papers 2023-18, University of Paris Nanterre, EconomiX.
    7. Mohammad Badsar & Matin Moghim & Mehdi Ghasemi, 2023. "Analysis of factors influencing farmers’ sustainable environmental behavior in agriculture activities: integration of the planned behavior and the protection motivation theories," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(9), pages 9903-9934, September.
    8. Beatty, Timothy & Lee, Goeun, 2023. "Wildfires and Farmworker Health," 2023 Annual Meeting, July 23-25, Washington D.C. 335461, Agricultural and Applied Economics Association.
    9. Srinivasagan N. Subhashree & C. Igathinathane & Adnan Akyuz & Md. Borhan & John Hendrickson & David Archer & Mark Liebig & David Toledo & Kevin Sedivec & Scott Kronberg & Jonathan Halvorson, 2023. "Tools for Predicting Forage Growth in Rangelands and Economic Analyses—A Systematic Review," Agriculture, MDPI, vol. 13(2), pages 1-30, February.
    10. Sultana Zeenat Fouzia & Jianhong Mu & Yong Chen, 2020. "Local labour market impacts of climate-related disasters: a demand-and-supply analysis," Spatial Economic Analysis, Taylor & Francis Journals, vol. 15(3), pages 336-352, July.
    11. Kulkarni, Kedar, 2021. "Quantifying Vulnerability of Crop Yields in India to Weather Extremes," 2021 Annual Meeting, August 1-3, Austin, Texas 313879, Agricultural and Applied Economics Association.
    12. Jhorland Ayala-García & Federico Ceballos-Sierra, 2024. "How do environmental shocks affect competitors in a supply chain? Evidence from a competitors’ weighting matrix," Documentos de trabajo sobre Economía Regional y Urbana 324, Banco de la Republica de Colombia.
    13. Ojo, Temitope & Adetoro, Adetoso A. & Ogundeji, Abiodun A. & Belle, Johannes A., 2021. "Quantifying the Determinants of Climate Change Adaptation Strategies and Farmers’ Access to Credit in South Africa," 2021 Conference, August 17-31, 2021, Virtual 315853, International Association of Agricultural Economists.
    14. Hrozencik, Robert A. & Perez-Quesada, Gabriela, 2023. "Drought and the U.S. Livestock Sector: Assessing the Impact of the Livestock Forage Program," 2023 Annual Meeting, July 23-25, Washington D.C. 335468, Agricultural and Applied Economics Association.
    15. Cai, Qingyin & Çakır, Metin & Beatty, Timothy & Park, Timothy A., 2022. "Drought and the Specialty Crops Production in California," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322530, Agricultural and Applied Economics Association.
    16. Levente Timar & Eyal Apatov, 2020. "A Growing Problem: Exploring Livestock Farm Resilience to Droughts in Unit Record Data," Working Papers 20_14, Motu Economic and Public Policy Research.
    17. Cowley, Cortney A. & Rodziewicz, David & Dice, Jacob, 2023. "Impacts of Drought in the U.S. Cattle Sector," 2023 Annual Meeting, July 23-25, Washington D.C. 335678, Agricultural and Applied Economics Association.
    18. Jing Yi & Samantha Cohen & Sarah Rehkamp & Patrick Canning & Miguel I. Gómez & Houtian Ge, 2023. "Overcoming data barriers in spatial agri‐food systems analysis: A flexible imputation framework," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(3), pages 686-701, September.
    19. Somdeep Chatterjee, 2022. "How Hard Did That Sting? Estimating the Economic Costs of Locust Attacks on Agricultural Production†," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(1), pages 434-459, March.

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    Keywords

    Drought; agriculture; irrigation;
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