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Drought costs farm profitability

Cowtowns and Skyscrapers: Recent economic study quantifies the economic impact of drought on Kansas farms.

Jennifer M. Latzke, Editor

August 18, 2023

3 Min Read
cracked ground in cornfield
ECONOMIC COST OF DROUGHT: Research on historical impacts of extreme heat on farm profitability provides evidence that Kansas farms could be impacted by increasing frequency and extremity of severe weather in the future.no_limit_pictures /Getty Images

Research projects can seem silly to the layperson, I know.

All too often, it is so easy for us to read a headline on our social media trending topics and get riled up over what we perceive as waste. But if we take a beat and think about the scientific process, we understand we have to crawl before we can fly.

Case in point: Last week I saw a headline coming out of K-State that agricultural economists measured extreme heat’s effects on farm income.

My first gut reaction was “Well, yeah, drought will cost you money, folks.”

But I read further.

Heat and farm profit

The researchers, including Jenny Ifft, Kansas State University agricultural economist, looked at historical impacts of extreme heat and drought on farm profitability to extrapolate what more and stronger bouts of severe weather might do to Kansas farm profitability in the future.

They counted extreme degree-days where the duration and intensity of temperatures were above a threshold of 89.6 degrees F. They accounted for farm prices, yield volatility, weather volatility and a host of other factors to try to put numbers to the relationship between farm income and extreme heat, using Kansas Farm Management Association data from 1981 to 2020.

What they found is that during the period of 1981-2020, for every 1.8 degrees of additional warming, gross income decreased by 7% and net farm income decreased by 66%.

Or, for every 1.8 degrees of warming, an average Kansas farm lost $34,650 in gross income and $54,119 in net income.

That makes sense, considering the loss in yields and the increase in expenses and operating costs that you see in drought years.

But why do we care?


Well, let’s consider that net income losses would be even greater without crop insurance and Title 1 and disaster programs. The study found that crop insurance prevented 51% of net income loss from extreme heat events for example.

Knowing that helps us justify crop insurance to those who would cut it.

The study showed that highly irrigated farms experience 37% less net income loss compared to other Kansas farms, allowing them to buffer drought conditions.

That information is handy to know as our state comes to grips with our declining aquifers and future water policy.  

Finally, drought doesn’t just stop at the farmer’s doorstep. It affects lenders, insurance companies, the Federal Crop Insurance Program, agribusinesses and our rural communities. Having this information can help our leaders better plan to weather any future droughts.

Now, it’s true — rains always come back. Droughts break. It may take a few years, but they break.

This study, though, tells me that farmers of the future will need to plan for drought and celebrate if they have more moisture. Maybe the phrase shouldn’t be “put something away for a rainy day,” but instead, “plan for drought and hope for rain.”

So, sure, the headline of the study sounds a little like scientists studying snails. But when you read beyond the headline, you see it’s a valuable starting point for a lot of policy conversations here in farm country.

About the Author(s)

Jennifer M. Latzke

Editor, Kansas Farmer

Through all her travels, Jennifer M. Latzke knows that there is no place like Kansas.

Jennifer grew up on her family’s multigenerational registered Angus seedstock ranch and diversified farm just north of Woodbine, Kan., about 30 minutes south of Junction City on the edge of the Kansas Flint Hills. Rock Springs Ranch State 4-H Center was in her family’s backyard.

While at Kansas State University, Jennifer was a member of the Sigma Kappa Sorority and a national officer for the Agricultural Communicators of Tomorrow. She graduated in May 2000 with a bachelor’s degree in agricultural communications and a minor in animal science. In August 2000 Jennifer started her 20-year agricultural writing career in Dodge City, Kan., on the far southwest corner of the state.

She’s traveled across the U.S. writing on wheat, sorghum, corn, cotton, dairy and beef stories as well as breaking news and policy at the local, state and national levels. Latzke has traveled across Mexico and South America with the U.S. Wheat Associates and toured Vietnam as a member of KARL Class X. She’s traveled to Argentina as one of 10 IFAJ-Alltech Young Leaders in Agricultural Journalism. And she was part of a delegation of AAEA: The Ag Communicators Network members invited to Cuba.

Jennifer’s an award-winning writer, columnist, and podcaster, recognized by the Kansas Professional Communicators, Kansas Press Association, the National Federation of Presswomen, Livestock Publications Council, and AAEA. In 2019, Jennifer reached the pinnacle of achievements, earning the title of “Writer of Merit” from AAEA.

Trips and accolades are lovely, but Jennifer says she is happiest on the road talking to farmers and ranchers and gathering stories and photos to share with readers.

“It’s an honor and a great responsibility to be able to tell someone’s story and bring them recognition for their work on the land,” Jennifer says. “But my role is also evolving to help our more urban neighbors understand the issues our Kansas farmers face in bringing the food and fiber to their store shelves.”

She spends her time gardening, crafting, watching K-State football, and cheering on her nephews and niece in their 4-H projects. She can be found on Twitter at @Latzke.

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