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Ocean-related decadal climate variability (ODCV) has the potential to influence regional climates and, in turn, crop yields. ODCV event forecasts with associated climate and crop yield implication information can provide farmers with the opportunity to alter their crop mixes and input usage to adapt to the forecast conditions. We investigate the value of ODCV information and the nature of adaptations. This is done by estimating the changes in welfare under differing information scenarios using a nonlinear dynamic optimization model. We find evidence that both perfect forecasts and the use of forecasts permitting a conditional probability of future phase combinations can significantly increase agriculture consumer and producer welfare. This is a new result that is an estimate of the US national value of releasing ODCV forecasts and accompanying yield information.

The Value of Ocean Decadal Climate Variability Information to United States Agriculture