AgBizClimate: A Farm-level Decision Tool for Measuring the Economic Impact of Climate Change

Website homepage to AgBiz Logic

Producers should understand the economic risks and advantages that heavy rains, drought, warmer winters, and earlier springs may bring to their operations.

Northeast

A changing climate is already impacting the agriculture industry. Producers should understand the economic risks and advantages that heavy rains, drought, warmer winters, and earlier springs may bring to their operations.  

AgBizClimate is one of five AgBiz LogicTM modules and is a climate change decision tool designed to help. AgBiz LogicTM uniquely collects, manages and optimizes farm level data as the basis for economic, financial, and climate decision-support tools. It enables agribusiness professionals to make sustainable choices that impact their bottom-line. AgBiz Logic gives producers access to the best available information about projected economic, financial AgBiz LogicTM and climate risks for their enterprises so they can then make informed investment decisions.

It allows producers to measure potential impacts of climate change on future net returns to crop and livestock enterprises. Using AgBizClimate, farmers can see the impact of expected climate changes on their specific farm’s economic costs and returns.  They can further see how changes in farm practices (management, technology changes, rotations, crop choices) and/or policy and price changes affect returns.  This tool is a powerful means to summarize and help farmers understand their area’s available climate information. More importantly, it shows how climate change could impact the costs and returns they are likely to face over the next twenty to thirty years. It is a farm-level management decision support tool but also and an assessment tool for researchers and government agencies. AgBizClimate can help determine how climate change and our responses may influence and impact regional agricultural sectors.

AgBizClimate projects up to 14 weather variables that may impact yields and product quality.  Efforts are being made to develop downscaled climate for each county in the U.S. out to 2040. Developers are also working to integrate short-term seasonal forecast capabilities. Economic and financial calculators are imbedded into the parent (AgBiz Logic) tool. Details about climate impacts and their potential effect on crop productivity will allow farmers to better understand how climate change may impact the economic viability of their farm enterprises given projected changes in the climate. . 

Producers can see how weather variables are expected to change given low and high emission scenarios. They are then able to estimate what impact those changes (e.g., changes in growing degree days) might have on their crop yield or quality. These projected impacts are then compared to farm-level financial information, using enterprise budgets, that gives farmers a sense of how these projected impacts might impact their financial bottom-line. The tool has additional modules, including AgBizProfit and AgBizLease. AgBizProfit uses these future budgets to estimate the profitability of adaptation strategies. AgBizLease can determine if current leases should be modified as a result of changing inputs. A whole farm/ranch analysis can also be developed using AgBizFinance to measure changes to a business’ liquidity, solvency, and profitability. 

The AgBiz tools were developed by Clark Seavert at Oregon State University, funded through a grant from the USDA National Institute of Food and Agriculture (NIFA). Further funding came from the USDA Northwest Climate Hub. These decision tools are scheduled to be released for the Pacific Northwest region in 2018. Efforts are underway to make this tool useful across the country, including the Northeast. To do that, local crop and livestock budgets as well as local weather variables and crop responses need to be incorporated into the model.  Input from local focus groups will help determine the expected impacts of climate change on various agricultural enterprises.


For more information, contact Clark Seavert at Oregon State University or Gabrielle Roesch-McNally with the Northwest Climate Toolbox. To help with the Northeast, contact Lynn Knight, NRCS Agricultural Economist and USDA Northeast Climate Hub Co-Director.