The enormous drought scorching the central USA will almost certainly cost at least $12 billion, making it the costliest since 1988, experts said Wednesday.
“There does seem to be near-unanimous agreement from industry experts that this year’s drought losses will surpass the $12 billion recorded in 2011,” says meteorologist Steve Bowen of Aon Benfield, a global reinsurance firm. . .
About 64% of the contiguous USA is in a drought, according to today’s U.S.Drought Monitor, a federal website.
“Right now, it is difficult to say whether we end up reaching the loss levels of 1988 ($40 billion) and 1980 ($20 billion), given that it will be several months for agricultural industries to fully assess the total extent of their losses,” Bowen says.
As readers here well know, comparing aggregate loss numbers over time requires understanding that context changes. It is not enough to simply adjust for inflation.