Crop Yield’s Variation and Climatic Conditions in Arizona

Abstract

This research explores the influence of climatic conditions on the mean and variance of crop yield in Arizona. We develop a stochastic seemingly unrelated regression model for capturing the impact of climate change on crop yield, and the correlation of yield among crops. By design the model can differentiate both long term impact (year-to-year, on the mean of yield) and short term impact (within year, on the variance of yield) of climate change simultaneously. Estimating the model for the 1965-2008 period across seven leading farming counties in Arizona, we find that the climatic conditions-crop yield relationship is crop-specific. Temperature is highly significant in explaining the mean change of both cotton and hay yield; yearly precipitation level is only slightly significant in explaining the mean change of cotton yield, while it is highly significant in explaining the mean change of hay yield. Results also indicate that as the within year variation of precipitation and temperature increase, the yield variation becomes smaller. Finally, the yield variation of cotton and hay tends to be positively correlated, although the strength of correlation varies among different counties.