New Zealand's sheep and beef farm profits could be halved by the century's end if global greenhouse emissions keep soaring unabated, a new analysis suggests. Photo / George Heard
New Zealand's sheep and beef farm profits could be halved by the century's end if global greenhouse emissions keep soaring unabated, a new analysis suggests. Photo / George Heard
New Zealand's sheep and beef farm profits could be halved by the century's end if global greenhouse emissions keep soaring unabated, a new analysis suggests.
Dairy farms, meanwhile, could take an average 20 per cent hit as a result of drier soils.
The new study, which comes as farmers in rain-starved parts of the country are grappling with unusually dry conditions, drew on around 70,000 tax returns and a range of temperature and soil moisture data.
It found a clear link between farm profits and local weather.
When they extrapolated the data forward, the researchers found that, under a business-as-usual emissions trajectory with little climate action and high economic growth, sheep and beef farmers could suffer a profit loss of up to 54 per cent.
The estimate, which was subject to a high degree of uncertainty, reflected how sheep and beef operations were vulnerable to high temperatures as well as soil moisture loss.
The effect of hotter temperatures on dairy farming was less clear, but on the basis of soil moisture loss alone, the sector, with a current export value of $20b, could see a profit loss of 20 per cent by 2100.
The analysis also found drier soils had immediate effects on dairy profits, but lagged effects on sheep and beef profits.
Each very dry day caused, on average, dairy and sheep and beef farms a loss in annual profits of around one average day, but hit the sectors in the same year, and over two years, respectively.
Due to large capital investments, it remained difficult for farmers to change the way they used their land.
New Zealand's sheep and beef farm profits could be halved by the century's end if global greenhouse emissions keep soaring unabated, a new analysis suggests. Photo / George Heard
While the creeping pace of warming meant it was unlikely that climate change would force land-use change in the near future, this could still play out in some parts of the country eventually.
"However, what's important is the relative attractiveness of animal versus other land uses," lead researcher Dr Kendon Bell said.
"To gain a full understanding of how climate change might affect land-use pressures, we require profit-weather functions for all relevant land uses, in addition to those provided here for dairy and sheep and beef."
Bell said that understanding the scale of the expected climate impacts across all sectors was key for central government when considering future budgets for adaptation support.
"If, as a hypothetical example, the scale of expected net damages to agriculture was one per cent of the expected net harm to human health, it would be difficult to justify putting 50 per cent of central government's adaptation budget into agriculture," he said.
"However, these quantitative comparisons are not yet straightforward, because the underlying quantitative studies have not yet been executed across all sectors."
Further analysis, led by Dr Lynn Riggs of Motu Economic Policy and Research and also supported by the Deep South Challenge, examined the impact of past, present and future drought on employment.
Overall, it found the relationship between drought and employment in New Zealand appears was complex, with soil moisture and temperature having different and sometimes offsetting effects within and across industries.
While the analysis was the first of its kind, the link between severe drought and climate change has now been well established here.
Researchers have estimated, for instance, that 2013's $1.3b drought was twice as likely to have happened because of human-driven warming.
Looking forward, drought was predicted to increase in frequency and severity - particularly along the eastern side of the Southern Alps - and could prove the climate impact that had the single biggest impact on our economy.
But the future frequency of these events depended on how quickly temperatures climbed in coming decades - and how swiftly the world decarbonised.
