Using insurance data to quantify the multidimensional impacts of warming temperatures on yield risk

Area of Science:

• Agricultural Science
• Climate Change Impact
• Risk Management

Background:

• Previous studies indicate negative impacts of warming temperatures on crop yields.
• Estimating yield risk and identifying causes of loss under climate change remains challenging.

Purpose of the Study:

• To quantify the impact of warming temperatures on yield risk for U.S. corn and soybeans.
• To disentangle the causes of yield losses associated with increased temperatures.
• To assess the implications for crop insurance costs.

Main Methods:

• Utilized a unique dataset of approximately 30,000 county-by-year observations on insurance-based yield risk measures (1989-2014).
• Analyzed cause of loss information to differentiate between drought and heat stress impacts.
• Employed statistical analysis to determine the relationship between temperature increases and yield risk.

Main Results:

• A 1°C temperature increase is associated with approximately 32% and 11% increases in yield risk for corn and soybeans, respectively.
• Additional yield losses under warming conditions are primarily attributed to increased drought occurrences.
• Heat stress contributes to yield losses but plays a lesser role compared to drought.

Conclusions:

• Warming temperatures are projected to significantly increase crop yield risk in the U.S.
• Drought is the primary driver of increased yield losses under warmer climates.
• The rising cost of crop insurance is an expected consequence for producers facing climate change.