Climate Change Impacts on the U.S. Livestock Sector and Possible Adaptations

Commodities

• Animals: poultry, swine

Practices

• Animal Production: animal protection and health, climate change adaptation

The project will investigate the impact of climate change on the U.S. livestock sector and the potential adaptation strategies to cope with climate change. The U.S. livestock sector, especially beef and chicken, are mainly produced in the Southern U.S. and has been threatened by climate change. However, according to IPCC, the Southern US is projected to be hotter with longer and worse extreme heat in the future, which makes the livestock sector less sustainable. The reduction in livestock yield will drive up meat prices, which in turn exacerbates the market situation of the low-income groups. The potential adaptation strategies need to be investigated to cope with climate change impact and protect the disadvantaged groups.

In this study, we will (1) Build econometric models to empirically estimate climate influence on the hog and chicken production in the U.S. and project the changes in production rates under various climate scenarios. 2) Embed the estimated results from objective 1 to the Forestry and Agricultural Sector Optimization Model (FASOM) model to simulate the integrated impact of climate change on the U.S. livestock sector, focusing on the production and price changes, resource reallocation, and farm income changes. (3) Investigate adaptation alternatives to cope with climate change (e.g. changing the mix of livestock and breeds and investing in equipment), and estimate the value of adaptation. (4) Investigate the impact of climate change on the disadvantaged groups and the welfare improvement associated with the adaptation strategies.

Objective 1: Estimate climate impacts on the livestock production in the U.S. and project future impacts under various climate change scenarios

We will build fixed effects panel econometrics models to empirically estimate the climate change impacts on hog and chicken performance, including hog slaughter weight, piglet litter size, piglet survival rate, broiler slaughter weight, rate of lay, and broiler survival rate. Temperature, relative humidity, temperature, and humidity index (THI) (Ekine-Dzivenu et al. 2020) are considered the key explanatory variables as heat stress is the major threat to livestock performance.

Based on the best model selected by cross-validation, the impact of climate change on livestock performance under various emission assumption scenarios will be projected from now to the end of the century using the CMIP6 version projected climate data by IPCC. The projected impacts will be used in Objective 2.

Objective 2: Estimate the integrated impact of climate change on the U.S. livestock sector

The projected impact of climate change on the hog and chicken sector will be embedded into the Forestry and Agricultural Sector Optimization Model (FASOM) model to estimate the integrated impact of climate change on the U.S. livestock sector. The impact of climate change on cattle performance including the calf survival, calf loss rate, beef and milk production based on previous group work (Wang 2020; Fan 2018) will also be embedded. FASOM will simulate the new market equilibrium of the livestock market under various climate change scenarios. A set of comparison scenarios with and without the impact of climate change on crop yield based on previous studies will also be made to investigate the indirect impact of climate change on the livestock sector which is imposed through feed cost changes and the land-use changes.

Objective 3: Investigate the adaptation possibilities and the value of adaptation

FASOM can also simulate the optimal adaptation strategies to cope with climate change given various impacts projected by Objective 1. The potential adaptation strategies include changing livestock and breed mix, altering the land use by livestock, improving livestock management, and investing in cooling facilities (Escarcha, Lassa, and Zander 2018). All potential adaptation strategies are endogenized into the model so that they can be selected as the best fit or tradeoff.

As a comparison, a set of scenarios that do not allow the adaptation will also be examined for each climate case. The difference in the objective function between the with and without adaptation scenarios will be counted as the value of adaptation.

Objective 4: Investigate the influence on the well-being of livestock producers and low-income farmers induced by climate change impact on livestock with and without adaptation

As the market equilibrium price and quantity and the input costs will be changed by climate change impacts, the farm income will be recalculated based on simulated price and quantities. The meat consumption and utility changes of the low-income group will also be recalculated based on market information and price elasticities and utility assumptions from literature.