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Effect of extreme weather on dairy industry structural change: Evidence from U.S. county-level data

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  • Belgacem, Wajdi
  • Xu, Zheng
  • Wang, Tong

Abstract

U.S. dairy consolidation has accelerated, yet the role of climate risk remains underexplored. Using county‑level panel data from five USDA Censuses of Agriculture (1997–2017) linked with gridded climate records, we estimate fixed‑effects Poisson models to quantify the effects of climate extremes on dairy farm numbers. A two‑standard‑deviation increase in heat stress reduces small‑farm counts by 75 percent and increases large farms by 94 percent. A similar increase in extreme drought further accelerates small‑farm exit by 3.4 percent. Climate stress thus reinforces structural dynamics favoring larger operations, underscoring the need for policies that strengthen the resilience of vulnerable producers.

Suggested Citation

  • Belgacem, Wajdi & Xu, Zheng & Wang, Tong, 2026. "Effect of extreme weather on dairy industry structural change: Evidence from U.S. county-level data," 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri 404478, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea26:404478
    DOI: 10.22004/ag.econ.404478
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    File URL: https://ageconsearch.umn.edu/record/404478/files/177528_193433_115232_DairyClimateStress_Paper_AAEA.pdf
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