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Abstract

This study examines the effect of climatic variables on dairy farm productivity using panel data for the state of Wisconsin along with alternative stochastic frontier models. A noteworthy feature of this analysis is that Wisconsin is a major dairy producing area where winters are typically very cold and snowy, and summers hot and humid. Thus, it is an ideal geographical region for examining the effects of a range of climatic factors on dairy production. This paper presents a preliminary analysis of the climatic effect on the productivity of Wisconsin farms. We identify the effect of temperature and precipitation, both jointly and separately, on milk output. The analysis shows that increasing temperature in summer or in autumn is harmful for dairy production, while warmer winters and warmer springs are beneficial. By contrast, more precipitation has a consistent adverse effect on dairy productivity. Overall, in the past 17 years, climatic conditions have had a negative impact on the dairy farms in Wisconsin and the data reveals a mild negative trend.

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