Agriculture was one of the first economic sectors studied in climate change impact research because of its importance to human survival and its well known sensitivity to climate (see d'Arge, 1975; Kokoski and Smith, 1987; Dudek, 1988; Adams, et al., 1989; Adams et al., 1990). Although these studies provide a methodological basis for studying the agricultural impacts of climate change, there are some important shortcomings in this literature.

First, early studies focused on conventional agricultural crops such as grain (e.g. corn and wheat) and soybeans. Results of these studies suggest that some regions of the United States, such as the Southeast, may suffer substantial economic losses if production of grains shifts to more northerly latitudes. However, since these southern regions are major producers of heat tolerant crops such as cotton, sorghum, fruits, and vegetables, failure to include such heat tolerant crops in previous analyses may overstate potential economic losses. In addition, the effects on livestock have been assessed through effects on the price of feed grains; direct effects of climate change on livestock weight gain and other performance measures are not addressed.

Second, previous analyses have incorporated only limited possibilities for farm-level adaptations or adjustments to climate change. There are several ways that farmers may be able to adjust. For example, if other inputs such as fertilizer or irrigation water are substitutes for “climate” in production, then farmers may be able to adjust input mixes to maintain or at least offset reductions in output levels in the face of adverse climate change.