The 2012 drought was obvious. It was hot and dry this summer. Crops and pastures burned up and the agricultural economy will feel it for years to come. Currently we are worried how livestock producers will fare. We are worried about the seed supply for 2013. And we are worried whether the subsoil will have enough water next spring to keep a crop growing. But what about the rest of the economy? How far down have the roots of the drought grown?
Every community will have a story about the drought. Mine is suffering from a 3-ft. drop in the level of the lake that supplies water for 85,000 people and major grain-processing plants. So water-use restrictions have been in place for weeks because the lake has more mudflats than waves.
Economists David Swenson and Liesel Eathington of Iowa State University have tallied the extent of the drought, but not the total impact, since that may not be seen for years. However, it is possible to determine what parts of the economy and day-to-day life that it has impacted to some degree. Their analysisis based in Iowa, but could be in any Corn Belt state. After all, 2,341 counties in the U.S. have either been designated by USDA as primarily or secondarily impacted from the drought. The economists say, “The initial impact of a drought is a sharp reduction in the state’s water supply, which in turn has immediate impacts on agricultural productivity, commercial activities that require water, and public goods that are water-based.”