Study: Natural Disasters Cost U.S. Farms $3.48B Annually, Drought Hits Hardest

Using FEMA and USDA data, Trace One researchers estimate average annual U.S. agricultural losses of $3.48 billion, with drought accounting for more than half.

Cattle in drought conditions_photo by 169169 via Adobe Stock.png

Photo by 169169 (Adobe Stock)

Photo by 169169 (Adobe Stock)

NASHVILLE, Tenn. (RFD-TV) — Natural disasters are a growing force behind food-price pressure and tighter farm margins — and drought is the biggest culprit, according to a new Trace One study by Federico Fontanella.

Using FEMA and USDA data, researchers estimate average annual U.S. agricultural losses of $3.48 billion, with drought accounting for $1.9 billion — more than half.

On the other hand, Hurricanes contribute about $485 million a year, flooding accounts for $437 million, and cold waves add $286 million. Hail, wind, heat waves, tornadoes, winter weather, and wildfires contribute hundreds of millions more in ag losses.

Drought-Related Ag Losses Uneven Across Regions

California leads with ~$1.3 billion in expected annual farm losses — and the highest per-farm hit (~$20,528) — reflecting the vulnerability of high-value fruits, nuts, and vegetables to water scarcity. Next are Texas (~$205 million), then Iowa, North Carolina, and Florida. At the county level, Santa Barbara, CA tops the list at ~$245 million a year, with Yolo, Napa, Sutter, and Colusa also high. Nationally, the average per-farm loss is $1,851.

Recent shocks show how hazards translate to costs — April 2025 flooding in eastern Arkansas damaged ~$99 million in crops, while Hurricane Helene (2024) prompted $221.2 million in USDA disaster block grants for North Carolina.

Farm-Level Takeaway: Prioritize drought resilience — water, insurance, and crop mix — and use local hazard maps to target investments in infrastructure, coverage, and diversification.
Tony St. James, RFD-TV Markets Expert
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Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

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