Climate Change and Agriculture in California:

Adaptation to Extreme Events November 16, 2011

Daniel A. Sumner

University of California Agricultural Issues Center

Major Points in the Presentation • Previous speakers have documented, climate has been

changing in ways relevant to agriculture – Temperature trends are well documented, higher lows in the

winter and the summer – Climate models suggest more variability, and in some

particularly vulnerable regions --east Africa • Climate shifts outside California affect agriculture

here directly through the demand side in global markets

• Increased climate variability and the frequency and magnitude of extreme weather events affect: – The supply side and the demand size of agricultural markets – Prices and quantities (and recall P x Q = Revenue) – Producers and consumers – Individual farms and industries as a whole

Historical maximum average temperature in summer and winter months for the period of 1909-2008 for Davis, CA

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66

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Max in Summer Max in Winter Linear (Max in Summer) Linear (Max in Winter)

Historical minimum average temperature in summer and winter months for the period of 1909-2008 for Davis, CA

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1909

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Min in Summer Min in Winter

Real gross domestic product from crop and animal production in California and the United States, 1963-2009

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Billions of dollars in California production Bi

llion

s of d

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rs in

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United States

California

Index of acreage and real value of California agricultural output

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Total acres

Total real value

Major Points in the Presentation • Impacts of climate on farm revenues and

consumers costs may differ depending on where the shocks occur

• Four responses to more variability and climate extreme events – Direct efforts to mitigate climate flux with

technology such as tolerant varieties or flexible planting and harvesting

– Storage and other tools for inter-temporal smoothing

– Trade and other tools for spatial smoothing – Diversification across commodities and locations

Milk and Cream12%

Grapes, All9%

Cotton Lint, All1%

Broccoli2%

Carrots1%

Avocados1%

Celery1%

Walnuts2%

Flowers and Foliage

2%

Hay, All2%

Rice2%

Chickens, All2%

Oranges, All2%

Almonds (shelled)6%Nursery

7%

Flowers and foliage 4%

Strawberries5%

Lettuce, All5%

Tomatoes, All4%

Pistachios2%

Other28%

Top Farm Commodities by value, California 2010 Total gross sales ~ $37.5 billion

.

Diversification across commodities • California commodity diversification is unlike many

regions, for example the American Midwest

• Commodity diversification means revenue is smoothed when supply or demand shocks occur

• Agriculture as a whole is diversified across crops and individual farms also diversify

• Farms grow several tree crops or several field crops and have rotations that include grains and hay and tomatoes, for example

Reminder: Natural Diversity is

California • California has a

wealth of climate diversity even within the zones shown.

• Extreme agriculturally- relevant climate events seldom affect the whole state.

Geographic diversity of alfalfa acreage

• Alfalfa production ranges from Shasta County to Imperial County, across a variety of climate zones

Geographic diversity of tomato acreage

• Most tomato acreage is for processing tomatoes

• Tomato acreage is

mainly in the Central Valley, but from Chico to Bakersfield

• Production takes place in several climate zones

Geographic diversification means smaller variability of production

• Agricultural production of commodities in California is smoothed by diversification across the state

• Some individual farms also diversify across regions to smooth production losses

• But, for more localized farms, the fact that aggregate production is spread means price does not rise when local yields fall

• This point applies with even more force for crops for which California agriculture competes with the rest of the U.S. and the world

Geographic diversification means smaller variability in prices

• Recall that for several tree nuts, many fresh vegetables, many fresh fruits and others California produces large or even dominant shares in relevant markets

• For these and some crops that feature strongly in local markets, bad weather here can drive price up, smoothing revenue

• For others (milk power, grains, upland cotton …) price responds much less to local weather and weather and supply and demand conditions elsewhere drive California our markets and prices

U.S. rice prices, 1972-77 and 2006-2011

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Jan. 1972- Apr. 1977

Jan. 2006 - Apr. 2011

Rice in California has particular characteristics

• But the California share in the global market is tiny

• Most price movements from season to season are driven by supply or demand shocks outside California

• Yield and regulatory restrictions are local shocks

Wheat acreage in Yolo County, with projected acreage under IPCC downscaled B1 and A2 climate scenarios, without using data on

shifts in variability in the past or projected into the future 0

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00ac

res

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Observed PredictedPredicted under B1 Predicted under A2

Wheat Acreage

Analysis of climate change and potential agricultural responses in Yolo County

Yolo county must take markets as given and thus local climate shocks do little to affect price or consumer availability unless selected demands are focused on local supply

Recent multidisciplinary research lead by Louise Jackson Jackson, L.E., V.R. Haden, A. Hollander, H. Lee, M. Lubell, V.

Mehta, T. O’Geen, M. Niles, J. Perlman, D. Purkey, W. Salas, D. Sumner, M. Tomuta, M. Dempsey, and S. Wheeler. 2011.

“Agricultural Mitigation and Adaptation to Climate Change in Yolo County, CA.”

• In preparation for a CEC California Climate Change Center Report.

Policy and Institutional Principles: what can public and private organization do?

• Enhance information flows, incentives and flexibility

• Improved forecasts with longer horizons (such as of el niño events) will have large payoffs

• Make technology options more accessible

• Adaptation in agriculture is local, but effective policy responses must reflect global impacts and inter-linkages.

• Flexible trade will play a critical role in both mitigation and adaptation, but will itself be shaped importantly by climate change.

• Avoid limiting incentives for private responses, including diversification, storage and trade

Responses to Climate change and especially increased variability in

poor countries

• Lybbert, Travis and Daniel A. Sumner. 2012. “AGRICULTURAL TECHNOLOGIES FOR CLIMATE CHANGE IN DEVELOPING COUNTRIES: POLICY OPTIONS FOR INNOVATION AND TECHNOLOGY DIFFUSION.” Food Policy, forthcoming 2012.

• The lessons also apply in California

Priorities especially relevant for California • Invest in agricultural R&D focused on

adaptation and flexibility

• Encourage development of practices that incorporate rapid response (frost control) or mitigation of impacts (drought tolerant varieties)

• Allow shifts in production patters without removing incentive through subsidies for the status quo (as in government provided insurance)

Thank you. Dan Sumner

www.aic.ucdavis.edu