Heatwave hammers farm income

By Blake Jackson

A recent study paints a grim picture of how rising temperatures are impacting the financial security of farmers. Conducted by a team from Cornell University, the Environmental Defense Fund, and Kansas State University, the research reveals that for every 1°C increase in heat, yields of major crops like corn, soybeans, and wheat plunge by 16-20%. This translates to a 7% drop in gross farm income and a staggering 66% decline in net farm income. 

The study, based on 39 years of data from Kansas farms, highlights the alarming consequences of climate change on the agricultural sector. "For decades, U.S. agriculture has enjoyed steady productivity growth," says Ariel Ortiz-Bobea, lead author and associate professor at Cornell. "However, climate change has reversed this trend, with global agricultural productivity 20% lower than it could have been without human influence." 

The research also identifies crucial risk management practices that help farmers mitigate the financial blow of extreme heat. Crop insurance emerged as the most significant buffer, recovering 51% of net losses. Government payments, adjustments in crop storage and sales strategies, and access to irrigation also played a vital role in cushioning the impact. 

"Interestingly, farmers have diverse coping mechanisms," observes Ortiz-Bobea. "While price adjustments and inventory management offer some relief, government programs like crop insurance provide the most substantial income smoothing." 

The study chose Kansas as a case study due to its high production of staple crops, diverse climatic zones, and readily available data. The analysis defines extreme heat as temperatures exceeding 32°C (89.6°F), noting that crop yields begin declining at this point. From 1981-1990, Kansas experienced 54 such days, compared to 57 between 2011-2020. 

Climate models predict a significant increase in hot days in Kansas by 2030 (58%) and 2050 (96%) compared to 1981-2020 temperatures. While a longer growing season might seem beneficial, the study found that "increasing temperatures appear to have a greater negative impact on growing conditions due to extreme heat than a positive impact through extending growing season length." 

To bolster farm resilience, the study recommends: 

• Financial institutions: Support farmer-borrowers in adopting climate-resilient practices and managing risks associated with such investments. 
• USDA, universities, and private sector: Increase research, outreach, and education on climate-resilient solutions to support farmers' adaptation. 
• Federal Crop Insurance Program: Facilitate the implementation of on-farm climate resilience measures while continuing to buffer financial risks. 

"Transitioning to climate-resilient production systems is crucial, but it may involve short-term risks for farmers," says Vincent Gauthier of EDF. "Developing financial and risk management solutions that proactively support farmers in this transition is critical for ensuring both agricultural production and farm sustainability in the face of climate change." 

Photo Credit: igor-stevanovic