Impacts of the Midwestern Drought Forecasts of 2000

Abstract

In March of 2000 (and again in April and May) NOAA issued long-range forecasts indicating that an existing Midwestern drought would continue and intensify through the upcoming summer. These forecasts received extensive media coverage and wide public attention. If the drought persisted and intensified during the summer of 2000, significant agricultural and water supply problems would occur. However, in late May, June, and July heavy rains fell throughout most of the Midwest, ending the drought in most areas and revealing that the forecast was incorrect for most of the Midwest. Significant media coverage was devoted to the ?failed? forecast, with considerable speculation that major economic hardship had resulted from the forecast. This study assesses the effects of the failed drought forecast on agricultural and water agency actions in the Midwest. Assessment of the agricultural and water management sectors revealed notable commonalities. Most people surveyed were aware of the drought forecasts, and the information sources were diverse. One-third of those surveyed indicated they did nothing as a result of the forecasts. The decisions and actions taken by others as a result of the forecasts provided mixed impacts. The water resource actions such as conserving water, seeking new sources, and convening state drought groups resulted in little cost and were considered to be beneficial. However, in the three areas of agricultural impacts (crop production shifts, crop insurance purchases, and grain market choices), mainly negative outcomes occurred. The 13 March issuance of the forecast was too late for producers to make sizable changes in production practices or to alter insurance coverage greatly, and most forecast-based actions taken in these two areas were considered to be negative but financially minor losses. However, 48% of the 1017 producers sampled altered their normal crop marketing practices, which in 84% of the cases led to sizable losses in revenue. This loss can be extrapolated as $1.1 billion for the entire Midwest if the sample statistics are representative of the region. A common result of the failed drought forecast among its users was a loss of credibility in climate predictions and a reluctance to use them in the future. Credibility is a fragile commodity that is difficult to obtain and is easy to lose.