The influence of meteorological conditions on dairy production

Relatively little attention has been paid in the economics literature to the effects of meteorological conditions on milk production. Meteorological variables can be expected to affect milk production through their impact on the productivity of cows and foodstuff production. Rather than including meteorological variables as inputs in the milk production process, we propose a production function where temperature and humidity directly affect the productivity of cows and where a series of meteorological variables can affect the productivity of expenditure on foodstuff, thereby indirectly affecting milk production. Using production and meteorological data from the Spanish region of Asturias corresponding to 382 dairy farms observed during a 6-year period from 2006 to 2011, the results from our estimated production function show the important impact of meteorology on dairy production. On average, we find a difference of 10% in variable profits due to operating under favourable or unfavourable weather conditions.