The 2012 Drought Could Become Second Most Expensive Weather Event In History
It was too soon to know just how bad it was going to be, since the harvest would come a few months later.
The Illinois' Department of Employment Security has now weighed in, and they make a pretty extreme call:
The twin effects of surging costs and lost income for farmers could make the drought the second most expensive "weather event" in history, after Hurricane Katrina.
Nope, were not paraphrasing:
The 2012 summer drought could become the second most expensive weather event ever, behind only Hurricane Katrina.
Here's how they reckon it:
Crop farmers not only had a terrible 2012 harvest but now find their soil fried for this year. Drought-resistant seeds are more expensive, the study notes.
The poor harvest sent prices skyrocketing. Between 2012 and 2013, food prices are expected to rise up to 4 percent.
Livestock farmers were probably the hardest hit, since most crops end up as feed, followed by ethanol and biodiesel fuel refiners.
And many livestock workers will probably lose their jobs, the study notes:
With corn and bean prices high, livestock producer margins will decline the more that those prices rise. More livestock will be slaughtered if feed is priced high or feed is not available. So short-term meat industry employment is expected to increase, but it is expected to decrease in the longer term.
And the inflation will not only be felt in the U.S., but in many emerging economies who depend on importing American food.
The price increases could thus force labor costs in those countries' importing sectors higher. That — and possible panic buying — could in turn lead to costly political instability there.
Finally, low water levels may impact tourism and recreation along the Midwest's waterways,as well as sti?e commercial barge traf?c. The drought has caused the Mississippi River level to be at its lowest level in decades.
The report's author, Dr. Dave Bieneman, doesn't put a total dollar figure on the disaster.
But it's pretty clear this was a total wipeout, even if wasn't overnight.
(h/t Chicago Magazine)