They also say yield reductions will be felt by orchards and horticultural crop production, but irrigated production may not suffer significantly provided water supplies are sufficient. The non-irrigated crops will realize yield reductions and affect the quality and quantity of those crops.
Other direct consequences
The most vulnerable non-farm industries include the ethanol refineries that have to pay higher costs for corn and the biodiesel plants that have to pay higher costs for soybeans. The seed industry may see increased costs and production disruptions and impacts on research plots.
Iowa’s insurance industry will also be affected because of the impact on crop insurance. They say the industry will not change markedly, the indemnity checks to be mailed out will deplete reserves and more adjustors will have to be hired to process claims.
Low water levels may also affect a state’s tourism and recreation industry, with reductions in sales. The same low water will stifle commercial barge traffic on the Mississippi River. They say that will reduce sales and gross revenue for operators and increase the operational costs for companies requiring shipping.
Businesses that sell trees, plants and flowers have suffered from the poor growing situation, and costs of production and maintenance have resulted in less business, as have landscapers. But power companies have seen increased business due to electricity sales for air conditioning. Their profits should increase.
Public water supplies have been stressed, and many others have had to cope with high use from customers wanting to maintain lawns and gardens. With public use of water facilities for recreation, the depletion of lakes and streams has resulted in lower use. The drought has affected fish and other wildlife dependent on the water.
Public infrastructure has been damaged because of the heat that has buckled many roadways and caused cracks that will result in highway deterioration.
Homeowners have increased home cooling costs due to the heat, along with increased water costs. But they will also be losing tangible assets such as trees, plants, shrubs and gardens that may die due to the heat and lack of water.
Other ripples through the economy will come with the reduction of livestock production, and the subsequent reduction of the demand for commercial feed. The economists report, “The widespread reduction in crop yields in Iowa will reduce harvest times, it will decrease grain hauling, and there will be less demand for grain storage. Farther on, reduced yields, especially in the eastern part of Iowa, will decrease the demand for barge transport. In the nearer term, warehousing and shipping might see the greatest impacts from reduced farm quantity production.”