Effects of Weather Extremes On Cotton Acreage Abandonment and Insurance Indemnities

The effects of different types of weather extremes (such as drought or flooding) on cotton acreage abandonment and crop insurance indemnities is estimated using county-level production and insurance data.  Weather extremes are significant predictors of cotton crop abandonment accounting for large losses in economic resources devoted to planting crops that are not harvested.  Access to irrigation can significantly mitigate effects of drought, but disruptions in irrigation supply can then lead to significant damages.  Economic loss measures are estimated, focusing on the Western portion of the Cotton Belt.