California farms are expected to lose a total of about $1.3 billion per year to natural disasters, an average per-farm loss of $20,528, according to Trace One analysis of Federal Emergency Management Agency data. The worst type of natural hazard for California’s agriculture is drought, which can reduce irrigation, shrink harvests and put extra strain on livestock. Photo by Mark Stebnicki httpswww.pexels

CALIFORNIA (MPG) - High grocery prices have been a defining economic story in recent years, driven by a combination of factors including pandemic-related supply chain breakdowns and labor shortages. However, an increasingly critical driver of food price inflation has been the impact of natural disasters, such as droughts, floods and hurricanes, on the nation’s agricultural output.

California farms have the largest losses due to natural hazards, according to a new study from Trace One, a company specializing in product lifecycle management and regulatory compliance software for the food and beverage industry.

In April, a devastating weather system massively flooded corn, rice, soybean, and wheat crops in eastern Arkansas, affecting 31% of agricultural acreage in the region and inflicting an estimated $99 million worth of damage. The  agricultural industry in North Carolina was hit hard by Hurricane Helene in late September 2024, prompting the U.S. Department of Agriculture (USDA) to grant $221.2 million in federal disaster assistance block grants to help the industry rebuild in the state.

The increased frequency of natural hazards has created a challenging environment for farmers. However, the effects of climate- and weather-related disasters are not uniform, varying greatly depending on location. To pinpoint where these events are having the greatest impact on farmers and the nation’s food supply, Trace One researchers conducted an in-depth analysis of the latest data from the U.S. Department of Agriculture and the Federal Emergency Management Agency (FEMA).

According to Federal Emergency Management Agency estimates, natural hazards cause an average of $3.5 billion in agricultural losses annually, with drought being the single largest contributor. Drought alone accounts for more than half of these losses, averaging $1.9 billion per year. The financial impact of drought underscores its threat to farmers, particularly in regions reliant on water-intensive crops.

Other significant contributors to agricultural losses include hurricanes, which cause $485 million in annual losses, along with flooding ($437 million) and cold waves ($286 million). Events such as hailstorms, strong winds, and heat waves collectively add hundreds of millions in losses to the yearly toll. While less frequent, disasters such as tornadoes, winter weather and wildfires also contribute economic strain in certain regions.

Natural disasters impacting agriculture vary significantly across U.S. regions due to differing climates and geographic vulnerabilities. Drought is a persistent challenge on the West Coast, particularly in California, as well as the Southwest and parts of the Southern Plains, where water scarcity hampers crop yields and livestock production.

Hurricanes have the most severe impact in the Southeast and Mid-Atlantic regions, where states such as Florida and North Carolina frequently experience storm surges and high winds that devastate crops and infrastructure. Riverine flooding is most problematic in the Mississippi River Basin and its extensive tributary networks, as well as in the Pacific Northwest. Cold waves are most prominent in the Midwest and Mountain West, where freezing temperatures can damage crops and livestock operations.

Taken together, California leads the nation in agricultural losses due to natural hazards, with farms in the state incurring an estimated $1.3 billion in losses annually. This figure dwarfs losses in other states, with drought being the most significant hazard affecting California’s vast agricultural sector. On a per-farm basis, California reports an average loss of $20,528, which is the highest of any state, reflecting its reliance on high-value crops such as fruits, nuts and vegetables, which are particularly vulnerable to water shortages.

By comparison, Texas, which ranks second, faces an expected annual loss of $205 million, with droughts again being the primary driver. Iowa, North Carolina, and Florida round out the top five, each suffering from a combination of droughts and hurricanes, although with lower total and per-farm losses than California.

At the county level, California continues to dominate the rankings, with Santa Barbara County reporting the largest expected losses at $245 million annually. Drought is the principal hazard here, impacting high-value crops including strawberries, vegetables and wine grapes.

Other California counties, such as Yolo, Napa, Sutter and Colusa, also rank highly, with annual losses ranging from $70 million to $115 million. These counties experience some of the highest loss rates per farm, with those in Santa Barbara County and Yolo County losing an estimated $180,339 and $144,645 each year, respectively.

According to the data for California, the total expected annual loss due to natural hazards is $1,283,017,450 and the expected annual loss per farm is $20,528 for a total of 62,500 farms. California’s expected annual loss rate is 2.2%, the total agriculture value is $58,490,098,696 and the worst natural hazard for agriculture is drought.

According to the date for the entire United States, the total expected annual loss is $3,480,816,585 and the expected annual loss per farm is $1,851 for a total of 1,880,000 farms. The country’s expected annual loss rate is 0.7%, the total agriculture value is $503,268,663,042 and the worst natural hazard for agriculture is drought.