News•January 10, 2013

USDA Declares Winter Wheat Belt Drought Disaster Area

On Wednesday, the U.S. Department of Agriculture (USDA) declared 597 counties across 14 states natural disaster areas as a result of the ongoing drought that threatens the winter wheat crop. These are the first drought-related natural disaster declarations of the year, and mark the second year in a row that such measures were necessary due to the drought event, which is the worst such event since the 1950s. Overall drought impacts across the continental U.S. improved slightly this week, due to mild weather and moderate rains that fell outside of the disaster areas.

U.S. Drought Monitor, January 8, 2013.
Click image to enlarge. Credit: NOAA/USDA

The disaster area encompasses much of the winter wheat belt, which runs north from West Texas into North Dakota. All but one of the 77 counties in Oklahoma were named disaster areas, as well as large portions of Kansas, Texas, Georgia, and Colorado.

A disaster declaration by the USDA makes qualified farm owners in affected areas eligible for low-interest emergency loans, and farmers whose crops are affected by the national disaster stand to be largely reimbursed through the federally subsidized crop-insurance program.

In order to automatically qualify as a disaster area, a county must have undergone at least eight consecutive weeks of severe drought, as defined by the U.S. Drought Monitor. The Drought Monitor is a combined measure of long-term and short-term drought impacts that is released weekly, and is produced in partnership with three federal agencies, including the USDA.

Large areas of the disaster area are still classified under extreme or exceptional drought, the Drought Monitor’s most severe categories, and continued heat and low precipitation allowed those conditions to intensify slightly in the Texas Panhandle and Hill Country.

All drought disaster incidents as of January 9, 2013.
Click image to enlarge. Credit: USDA

Only minor improvements were made to the Drought Monitor nationwide, and almost all occurred outside the disaster area. Some moderate rains allowed the area of land under moderate drought or worse to shrink slightly, from 61.09 percent a week ago to 60.26 percent. Along the Gulf Coast, rains brought an easing of the extreme drought region in parts of East Texas, and in North Dakota, accumulated snowfall allowed the drought-free area of the state to expand from 11.09 percent to 34.46 percent.

Crop insurance covers more than $110 billion of liability over 264 million acres and 500,000 farms in the U.S. Payouts associated with the 2012 drought are expected to reach a record high, Reuters reported. Indemnity payments for 2012 so far sit at $10.7 billion, which is just shy of the $10.8 billion record paid in 2011. Some analysts predict the final payout will exceed $20 billion.

However, crop losses reflect only a fraction of the total cost of the drought, which has affected areas of the economy that range from livestock production, to commerce on the Mississippi River, to the running of nuclear power plants.