The phrase climate change can spur strong emotions in the farming and ranching world. But if you take the politics of cause out of the discussion, there are few in rural America that will argue that the weather is getting weird. Wildfires, droughts, massive rain events, hurricanes all have farmers, scientists, policy makers and others paying close attention.
Another group to add to that list, farm lenders. Curt Covington, Executive Vice President at Farmer Mac, said 20 years ago, if lenders would have included weather risk in their enterprise risk management studies, people would have questioned the decision making process.
“But more and more today, the idea of climate change, weather risk, trying to access weather risk; and the challenge for bankers, as the same with farmers, are these short-term trends, because some would suggest that this is just a cycle, some suggest that its more of a long-term systemic issue. But, in both cases, dealing with weather risk, particularly, as a nationwide lender is really important.”
Covington pointed to the massive wildfires in California and the flooding taking place in the Midwest as two cases where weird weather has their focus. He added, whether this is a short-term, or a long-term problems, lenders will be watching weather for the foreseeable future.
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