Prolonged droughts across U.S. farmland and South American coffee regions are pushing up prices of key commodities. Coffee bean prices have surged between 78% and 103% due to prolonged dry conditions in Brazil and Colombia. Meanwhile, in the U.S. West, the persistent drought has reduced cattle herds to their lowest levels in 70 years-driving ground beef prices up 12.8%, with average steak prices climbing to $10.98 per pound.

Wheat production under strain in the heartland
In the U.S. Plains, the combination of persistent drought and unfavorable commodity prices is pushing many wheat farmers to switch crops. Some are converting fields to corn, soybeans, or pastureland. Although this year's wheat yield was solid, prices have fallen to a five-year low, making it financially unviable for many to maintain wheat cultivation. In Nebraska, for example, wheat acreage has plummeted from 2.2 million acres in 2005 to under one million acres.

Economic ripple effects on ag supply chains
The triple shock of rising input costs, reduced output, and changing crop patterns is straining the agricultural supply chain. Higher production costs for irrigation, feed, fuel, and transportation are compressing margins. Producers of key goods-especially coffee and beef-are facing the brunt of inflationary pressures.

The beef sector illustrates this stress. U.S. beef processors like Tyson are reporting losses in revenue, partially offset by increased sales of cheaper beef cuts. This reflects not just producer challenges but shifts in consumer behavior due to inflation.

At the same time, the coffee industry is confronting both reduced availability and escalating input costs, such as fertilizers and labor, linked to climate variability and market volatility.

Climate and market drivers
Beyond commodity markets, drought intensifies structural issues: decreasing soil health, shrinking water availability, and increasing reliance on crop insurance. Access to irrigation becomes more critical, yet more expensive. In the Midwest and West, farmers are forced to make tough decisions-retire wheat fields, reduce herd sizes, or pivot to less water-intensive crops like soy or corn.

Weather unpredictability is pushing many producers to embrace new tools. Precision agriculture technologies-satellite mapping, AI-based irrigation, and IoT soil sensors-are increasingly used to reduce water waste and maximize yield. Still, implementation remains uneven, especially among smallholders and family-run farms lacking access to financing or technical expertise.

Sectoral adaptation in U.S. agriculture
The need for system-wide adaptation is clear. Land-grant universities are playing a central role in disseminating research on drought resilience, water management, and soil conservation. Meanwhile, cooperatives (co-ops) are stepping up to provide technical assistance and financial tools to member farmers navigating rising risks.

Policy shifts are also in motion. The upcoming Farm Bill is expected to increase support for climate-smart practices, including subsidies for drought-resistant crops, improvements in water infrastructure, and expansion of USDA conservation programs. At the same time, private investment in agritech-especially in biofuels, carbon sequestration, and value-added processing-is growing as stakeholders look to build a more resilient food system.

Despite recent rains in some parts of the U.S., the long-term trend remains worrisome. Drought-induced stress is not just seasonal; it reflects broader climatic shifts that require durable responses from farmers, industry leaders, and policymakers alike.