R
Ridgerunner
Guest
I have never seen the 3/4 trillion figure, but I suppose it depends on what one adds in, and when one compares to. I suspect the “weather related costs” in northern China alone are staggering because of the overutilization of the soil and microclimate changes due to it. How you would value it would depend on whose prices you use and the baseline you use for comparison.
For example, the net GAIN in corn production was about 3 billion bushels in the U.S. alone from 2012 to 2013. Depending on which year you use for prices, it could be said that the net loss in profits would have been about $9 billion for those who had corn. But if you use 2012 prices alone, the net gain would have been about $21 billion if considered as a whole.
The difference in crop yield really was weather-driven, but the difference in economic value gained or lost depends on what you are using for comparison.
On the other hand, beef production would have shown a “weather related” net loss in 2013, not because of 2013 weather, but because of 2011 and 2012 weather combined with the high 2011 and 2012 corn prices and the fear of more of the same (which didn’t pan out, of course). Beef production has about a 3-4 year lag time between a production drop and a regain, no matter what. But the experience of high feed costs for two years and low beef prices for several years has made cattlemen cautious, and there is little sign of significantly increased herd numbers in the near future despite really high cattle prices presently. So, a man with the same herd in 2013 as he had in, say, 2008 will have a greatly increased production value measured in dollars. But if he sold down in 2011 or 2012, he might be dead even, at a slight gain or at a loss.
Now, nobody really knows what corn and soybean plantings will be like in 2014. Probably corn will be down and soybeans up. There’s more wheat growing in 2014 than in early 2013, which means less corn and more soybeans because you can plant soybeans after wheat harvest quite readily whereas you can’t double crop soybeans after corn most of the time. So, if you use grain, generally, as your yardstick, 2014 will probably show a net gain while showing a net loss in corn. That would be “weather related”, but not because of 2014 weather. It would be due to 2013 weather or even 2012 weather.
And if corn prices spike, poultry production will go down, but not immediately. Hog prices will go down, but less so, since hogs can do as well on distillers’ grain as on corn, whereas poultry can’t.
All of that is weather related in a way, but not directly and not immediately.
I don’t know anything about Florida except that it’s warm and low-lying. This year I gained a greater familiarity with our local geology, so while I am concerned about a return of the 1950s cycle (warm western Atlantic, cold eastern Pacific) and resultant drought in the southern plains and adjacent areas, I do not particularly fear water shortages at any but the depths above where any well or year-round spring is. On adjacent geological features, though, I would be very concerned.
Rob