Economic Assessment of the 1999 Drought: Agricultural Impacts Are Severe Locally, but Limited Nationally

by Mitch Morehart, Noel Gollehon, Robert Dismukes, Vince Breneman, and Ralph Heimlich

While the 1999 drought has had severe financial impacts on agricultural producers in the drought regions, its impact on U.S. agricultural production has been limited. The drought will reduce commodity receipts relative to 1998 by an estimated $1.29 billion. Estimated farm net income losses, including expected yield losses, increases in expenses, and insurance indemnities, will total $1.35 billion, about 3 percent of expected 1999 U.S. net farm income. Drought impacts in areas of the Northeast designated as extreme and severe drought are expected to reduce farmers' net income by nearly $840 million. The regions affected, the crops grown in those regions, the increased use of irrigation, and crop insurance coverage limited the drought's impacts on agriculture nationally. Drought also affects the rural population by reducing water supplies available for human and livestock consumption.

Keywords: Drought, U.S. agricultural production, 1999 U.S. net farm income

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