Affiliation:
1. Center for Research on the Economics of the Environment, Agri‐food, Transports and Energy (CREATE) and Department of Agri‐food Economics and Consumers Studies University Laval Quebec City Canada
2. Department of Agricultural, Food, and Resource Economics Michigan State University East Lansing Michigan USA
Abstract
AbstractIn this paper, we investigate the impacts of climate extremes on the production and trade of apples. Apple production being notoriously sensitive to climate shocks, we show that March and April temperatures and precipitations beyond estimated thresholds cause large yield reductions in Quebec and Ontario. In years when climate shocks are large and highly correlated across space, large variations in national production cause major variations in trade flows. Hence, we exploit the theoretical foundations of a sectoral structural gravity model to implement counterfactual trade experiments about harvest shocks in Canada and the United States. We report changes in tariffs, imports, exports, farmgate prices, and in consumer welfare. The shocks greatly impact trade between North American countries but have little impact on other countries except for Chile and New Zealand which see their exports grow.
Funder
Ministère de l'Agriculture, des Pêcheries et de l'Alimentation
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