US Hit by Worst Drought in Decades, Wheat and River Shipping at Risk

The United States is enduring the most widespread drought in decades, with conditions persisting and expanding into late May 2026. According to the U.S. Drought Monitor, 52.15% of the United States and Puerto Rico, and 62.42% of the Lower 48 states, were under some level of drought as of May 19, 2026, with more than 20% classified as extreme drought (D3) or worse. The National Oceanic and Atmospheric Administration confirmed that the January to March 2026 period was the driest first quarter for the contiguous United States since records began in 1895, breaking a 116-year-old benchmark.

The geographic spread is unusual. Unlike past episodes that concentrated in the Southwest or the Plains, the current drought stretches from the Southeast through the Great Plains, the Rockies, and into parts of the Pacific Northwest. Florida and Georgia are blanketed by drought, with significant areas in exceptional drought (D4). California, briefly drought-free in January 2026 for the first time in 25 years, has seen moderate drought return across the northern part of the state in recent weeks. Across the West, mountain snowpack ended the winter well below average, and a record-breaking March 2026 heat wave pushed peak snowmelt 21 to 34 days ahead of schedule, draining the natural reservoir that normally feeds rivers and irrigation systems into summer.

The drivers are well understood. A lingering La Nina suppressed winter rainfall across the South, weak Pacific storm activity starved the Northwest, and elevated temperatures accelerated evaporation and soil moisture loss. The Climate Prediction Center has now placed the country under an El Nino Watch, with an 82% probability that El Nino conditions emerge during the May to July 2026 window and a 96% probability they persist into the 2026-27 winter. A potentially strong El Niño later in the year could deliver wetter conditions to parts of the southern and western United States, but agricultural and hydrological systems will feel the deficit through the summer regardless.

The most direct economic blow is to winter wheat, the row crop most exposed to the drought footprint. As of late April 2026, only 30% of the U.S. winter wheat crop was rated good or excellent, compared with 45% one year earlier. The poor to very poor share reached 33% of the crop. Kansas, the largest hard red winter wheat producer in the country, sits at the center of the problem. The 68th annual Hard Winter Wheat Evaluation Tour, conducted from May 12 to 14, 2026, projected the Kansas crop at 218 million bushels with an average yield of 38.9 bushels per acre, well below recent norms. Scouts documented widespread drought stress, freeze damage, and wheat streak mosaic virus, with some western Kansas fields below the harvestable 10 bushels per acre threshold. Industry estimates place statewide abandonment at 10 to 13%, with further deterioration possible if dryness extends into June. The USDA has issued Secretarial natural disaster designations for numerous counties across Texas, Kansas, Colorado, Nebraska, and Oklahoma. The May 2026 World Agricultural Supply and Demand Estimates report forecast average wheat prices around $6.50 per bushel, with significant volatility expected as traders track weather in the southern Plains.

Corn and soybean prospects look more resilient at this stage. USDA projects 2026-27 U.S. corn production near 16 billion bushels and soybean output near 4.44 billion bushels, supported by an on-pace spring planting and the fact that the Midwest core has so far escaped severe drought. That picture could change quickly if dryness expands into the Corn Belt during the pollination window in July.

Groundwater offers only a partial cushion. The Ogallala Aquifer, which sustains roughly one fifth of U.S. wheat, corn, cotton, and cattle production, continues to be drawn down faster than it can recharge. The U.S. Geological Survey reports that water levels have fallen more than 100 feet in some Ogallala areas since predevelopment, with saturated thickness cut by more than half in places. Nebraska, Texas, and Kansas account for the bulk of withdrawals. Other major aquifers face similar pressure, including the Mississippi Embayment, the Central Valley aquifer in California, and the Sparta aquifer underlying parts of Arkansas, Louisiana, Mississippi, and Tennessee. Scientists warn that deep soil moisture deficits can persist for months even after rain returns, because underground reserves recharge slowly.

The economic exposure extends well beyond farming. The Mississippi River system, which carries an estimated 92% of U.S. agricultural exports and 78% of global grain and soybean exports, has already shown repeated low-water disruptions in 2022, 2023, and 2025. A renewed summer low-water event would force barges to lighten loads, reduce convoy sizes, and lengthen transit times, raising freight costs for grain shippers, fertilizer importers, coal movers, and petroleum operators. The river corridor supports roughly $500 billion in annual revenue and about 1.5 million jobs.

Hydropower is another pressure point. The Missouri River basin is now in its fourth consecutive year of drought, and the U.S. Army Corps of Engineers warned in April 2026 that low Plains and mountain snowpack will reduce generation at federal dams on the upper Missouri system. Reservoir operators across the West are managing tighter releases, and utilities have begun planning for higher reliance on natural gas peaking plants. Western wildfire risk has also climbed sharply, with insurers and state emergency agencies bracing for an active fire season as vegetation dries out earlier than normal. Municipal water utilities in parts of the Southeast and the West are reviewing voluntary restrictions, and barge-dependent industries from chemicals to construction aggregates are reassessing inventory positions.

For now, the United States is entering summer with a major water deficit. Relief will depend on whether the developing El Nino delivers consistent rainfall to the southern Plains and the Southeast in the second half of 2026, and on the trajectory of mountain snowpack in the next water year. Until then, agricultural buyers, freight operators, and utilities should expect continued price and logistical volatility across wheat, river freight rates, and Western power markets.