Economic Impact of Hurricanes throughout the United States

During the last two months, several major hurricanes, namely Harvey, Irma, Maria, and Nate, have devastated jurisdictions along the south of the United States, particularly Texas, Louisiana, Alabama, Florida, and Puerto Rico. These natural disasters provoked major economic interruptions and losses in the areas affected, which in turn have led to an overall loss of over 30.000 jobs in the United States during the last several weeks. Some of the key economic sectors affected are hospitality and tourism as well as agriculture.

Economic Impact of Hurricanes throughout the United States

In the specific case of Florida, the citrus industry in the state averages an annual value of over US$1 billion. However, it is estimated that hurricane Irma alone cost the state’s citrus industry over US$760 million in damages and losses, with more than 420.000 acres of citrus operations adversely affected by the storm. Some of the heaviest losses were reported in Hendry and Collier counties in southwestern Florida, where agricultural losses averaged US$2.500 per acre throughout some 94.000 acres. Meanwhile, other thirteen counties in the Sunshine state registered losses between US$1.100 and US$1.750 per acre throughout a total of almost 350.000 acres. Furthermore, because citrus orchards are a permanent crop, farmers and growers are worried that sections of their operations might be lost due to flooding and, consequently, rotten trees and eroded soil.

Simultaneously, hurricane Irma also affected about 163.000 acres of other fruit and vegetables crops, whose estimated worth was of US$180 million. Other side effects from hurricane Irma, such as the loss of chemical pesticides and fertilizers is estimated at US$72 million, while the total cost of damages caused by salt-water inundation from the ocean is expected to be over US$30 million. Likewise, the losses in basic irrigation infrastructure, such as pipes, are calculated to be of US$40 million and the costs of cleanup are projected at US$27 million. Overall, the monetary losses of Florida’s agricultural industry due to hurricane Irma are approximately US$2.5 billion. Similarly, it will take at least a couple of months for local operators, farmers, and state authorities to reestablish the agricultural industry into full production. The severe agricultural losses provoked by major storms during this hurricane season, all along the southern United States, will certainly result in higher prices for goods such as citrus, vegetables, cotton, and even cattle, amongst others. Likewise, a decrease in domestic agricultural production will also prompt an increase in the import of agricultural goods as well as other foodstuffs.

The thoughts and prayers of CEO J. Dax Cooke and of Farmfolio’s team go out to all those affected by natural disasters in recent months. At the same time, Farmfolio remains committed to delivering organic and high quality agricultural products to markets throughout North and South America, while also protecting the confidence that our investors and stakeholders have entrusted upon us.

(Read more about Agriculture and Trade in the Caucasus Region)