Epsilon Archive for Student Projects

Abstract

This study investigates the relationship between dairy farm productivity and high temperatures in Sweden over the period 2002–2021, addressing a significant research gap related to both geographical location and production method within the literature on climate change’s impact on agricultural production.
Using a Recentered Influence Function method combined with Unconditional Quantile Regression, we estimate the effect of an additional day per year with temperatures exceeding 25°C on various productivity quantiles. This approach captures not only the effect of extreme temperature days but also how the impact varies across the productivity distribution.
The results reveal stronger effects for lower-productivity farms as well as for organic farms. However, for organic farms, the effect is less statistically significant, suggesting considerable heterogeneity within this subgroup. These findings are then interpreted in the context of previous research, mainly conducted outside Northern Europe, that links high temperatures to productivity losses through three main channels: loss in cow health and fertility, reduced pasture quality, and decreased milk yield. Contrary to expectations, this study finds an increase in milk yield, potentially attributed to higher purchases of concentrate feed, which likely compensate for diminished pasture quality. No evidence supporting claims of high temperatures negatively impacting cow health was identified.
The results contribute to the literature by enhancing our understanding of the distributional impacts of climate change on farm productivity. They may offer valuable insights for future policy development, as well as for farmers and extension workers who will face the challenges posed by climate change firsthand.