Farming-System Resilience to Severe Drought: Climate Memory, Crop-Mix Adjustment, and Agricultural Insurance

As extreme weather events become more frequent or severe, farming-system resilience increasingly depends on persistent structural adaptation. This study investigates whether severe droughts are followed by sustained crop-mix adjustment and how prior drought exposure and agricultural insurance moderate this response. Annual data for 280 U.S. counties extend through 2025; local-projection base years end in 2024 and shorten with the response horizon. Panel local projections, event-time diagnostics, LightGBM, and CausalForestDML describe land-use dynamics and adaptation patterns. Crop-mix distance and diversification peak within two to three years. Responses weaken in years four to five and are no longer statistically significant by year five. Counties with greater prior drought exposure show stronger structural responses. Higher baseline insurance exposure is associated with weaker adjustment, consistent with adaptation lock-in. These results concern county-level land use and do not directly measure income buffering, farmer learning, or welfare improvements. Predictive and heterogeneity findings are exploratory given overlapping label windows and the limits of the observational design. Policy implications require evaluation within the U.S. institutional setting before transfer to other countries.