Essays on weather changes and U.S. cattle industry

Abstract

The U.S. cattle sector is the largest agricultural industry with the world’s largest fed-cattle industry. Cattle production is highly specialized with cow-calf operations that graze pastureland and feedlot operations that focus on feeding grain-based diets to finish cattle for slaughter. Weather changes, forage availability, economies of size, and production practices create unique challenges across cow-calf production regions. Weather changes, in particular, can alter livestock production. In response, producers may adapt their production practices to changing natural and policy environments. This dissertation contains two chapters providing insights into how weather changes impact the cow-calf industry in the United States. Essay 1 examines the weather impacts on location and production of the cow-calf sector between 1992 and 2017. Econometric models are estimated using county-level agricultural data from the Census of Agriculture-United States Department of Agriculture of 25 states. The selected sample of states held more than 88% of the national beef cow inventories. Key explanatory variables in this study are county-level seasonal average temperature and total precipitation from PRISM daily climate data. Results demonstrate that seasonal temperatures and total seasonal precipitation significantly impact county-level beef cow inventories and operational locations. Essay 2 evaluates the impact of long-term weather changes on the cow-calf production decision using a dynamic panel estimator. By exploiting seasonal weather changes and using 67 years of state-level beef cow inventories, the study estimates the impact of seasonal weather on the U.S. cow-calf industry across 25 major cow-calf producing states. Results suggest that the U.S. cow-calf industry is indeed sensitive to weather. The results of an out-of-sample prediction assessment further suggest that adding seasonal weather information improves the prediction ability of state-level beef cow inventories.