The economic effects of climate change on milk production in Lower Saxony

The results of this contribution indicate that climate change has overall positive direct effects on the dairy farms in Lower Saxony. On average, farms in this area profit from the general warming, as it provides maize, an important forage plant, with better conditions of growth. Grass silage and decreasing milk production are hardly affected by heat stress, on an average. With regard to the operating profits of the typical farms in the regions surveyed, the effects under analysis led to increases of up to twelve per cent, depending on the region. The positive tendency for the operating profit will persist if a price elasticity of one is assumed and the price of maize decreases due to the considerable extra yield. The annual fluctuations in weather activity as well as individual years with extreme weather can exceed the effects of climate change on the operating profit, even if fluctuation ranges and extremes are taken into account which have occurred in the past and which do not reflect the assumed increase in weather variability due to climate change. These results fall into line with what farmers stated in the discussions of the focus groups. On the whole, they do not expect to be negatively affected by climate change, not least because their own belief and experience is that they are able to adapt to long-term changes well. What the farmers do see as a risk are extreme weather conditions, which occur more often and more violently.