Economic impacts of climate change on California agriculture

Using county-level data from the United States Department of Agriculture’s Census of Agriculture, this study evaluates the effect of weather and climate on agricultural profits in the State of California. The approach is to estimate revenue less variable production cost per acre as a function of land characteristics, weather realizations, and climate. This model is then used to evaluate the effect of two scenarios of climate change for the state of California over the coming century. The preferred estimates indicate that climate change is associated with a negative effect on aggregate agricultural profits by the end of the century. There are significant caveats to this result, including the lack of statistical precision, and keeping water supply and farm prices constant.