IDEAS home Printed from https://ideas.repec.org/a/bla/canjag/v72y2024i3p325-346.html
   My bibliography  Save this article

Climate change, production and trade in apples

Author

Listed:
  • Bruno Larue
  • Alan P. Ker

Abstract

In 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. Nous étudions les impacts des extrêmes climatiques sur la production et le commerce des pommes. La production étant notoirement sensible aux chocs climatiques, nous montrons que des températures et précipitations en mars et avril au‐delà de seuils estimés engendrent de larges baisses de rendements au Québec et en Ontario. Nous montrons que lorsque les chocs climatiques sont substantiels et fortement corrélés dans l'espace, d’énormes variations dans la production engendrent des changements majeurs dans le commerce. Donc, nous exploitions les fondations théoriques d'un modèle gravitaire structurel sectoriel pour mener des expériences contrefactuelles, rapportant les changements dans les tarifs, les importations, les exportations, les prix à la ferme et le bien‐être des consommateurs induits par des chocs sur les récoltes canadiennes et américaines. Ces chocs engendrent de grands changements sur le commerce des pays d'Amérique du Nord, mais ont peu d'effet sur la majorité des autres pays, à part le Chili et la Nouvelle‐Zélande voient leurs exportations augmenter.

Suggested Citation

  • Bruno Larue & Alan P. Ker, 2024. "Climate change, production and trade in apples," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 72(3), pages 325-346, September.
  • Handle: RePEc:bla:canjag:v:72:y:2024:i:3:p:325-346
    DOI: 10.1111/cjag.12367
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/cjag.12367
    Download Restriction: no

    File URL: https://libkey.io/10.1111/cjag.12367?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Fontagné, Lionel & Guimbard, Houssein & Orefice, Gianluca, 2022. "Tariff-based product-level trade elasticities," Journal of International Economics, Elsevier, vol. 137(C).
    2. Hansen, Bruce E, 2002. "Tests for Parameter Instability in Regressions with I(1) Processes," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 45-59, January.
    3. Yue, Chengyan & Alfnes, Frode & Jensen, Helen H., 2009. "Discounting Spotted Apples: Investigating Consumers' Willingness to Accept Cosmetic Damage in an Organic Product," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 41(1), pages 29-46, April.
    4. Pesaran, M. Hashem, 2015. "Time Series and Panel Data Econometrics," OUP Catalogue, Oxford University Press, number 9780198759980.
    5. Wendkouni Jean‐Baptiste Zongo & Bruno Larue & Carl Gaigné, 2023. "On export duration puzzles," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(2), pages 453-478, March.
    6. Anderson, James E. & Yotov, Yoto V., 2016. "Terms of trade and global efficiency effects of free trade agreements, 1990–2002," Journal of International Economics, Elsevier, vol. 99(C), pages 279-298.
    7. Stephen Devadoss & Prasanna Sridharan & Thomas Wahl, 2009. "Effects of Trade Barriers on U.S. and World Apple Markets," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(1), pages 55-73, March.
    8. Rose, Andrew K., 2004. "Do WTO members have more liberal trade policy?," Journal of International Economics, Elsevier, vol. 63(2), pages 209-235, July.
    9. David W. Wolfe & Arthur T. DeGaetano & Gregory M. Peck & Mary Carey & Lewis H. Ziska & John Lea-Cox & Armen R. Kemanian & Michael P. Hoffmann & David Y. Hollinger, 2018. "Unique challenges and opportunities for northeastern US crop production in a changing climate," Climatic Change, Springer, vol. 146(1), pages 231-245, January.
    10. Baier, Scott L. & Yotov, Yoto V. & Zylkin, Thomas, 2019. "On the widely differing effects of free trade agreements: Lessons from twenty years of trade integration," Journal of International Economics, Elsevier, vol. 116(C), pages 206-226.
    11. Ker, Alan P. & McGowan, Pat, 2000. "Weather-Based Adverse Selection And The U.S. Crop Insurance Program: The Private Insurance Company Perspective," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-25, December.
    12. Anthony Louis D'Agostino & Wolfram Schlenker, 2016. "Recent weather fluctuations and agricultural yields: implications for climate change," Agricultural Economics, International Association of Agricultural Economists, vol. 47(S1), pages 159-171, November.
    13. Lee, Kwanyoung & Gallardo, R. Karina & Giacinti, Miguel, 2020. "The Indian Demand for Imported Fresh Apples: Effects of Tariff Reductions," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 52(1), pages 30-46, February.
    14. Fally, Thibault, 2015. "Structural gravity and fixed effects," Journal of International Economics, Elsevier, vol. 97(1), pages 76-85.
    15. Xavier Gabaix, 2011. "The Granular Origins of Aggregate Fluctuations," Econometrica, Econometric Society, vol. 79(3), pages 733-772, May.
    16. Chemeris, Anna & Liu, Yong & Ker, Alan P., 2022. "Insurance subsidies, climate change, and innovation: Implications for crop yield resiliency," Food Policy, Elsevier, vol. 108(C).
    17. Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 138-160, February.
    18. Richard Carew & Wojciech J. Florkowski & Elwin G. Smith, 2012. "Hedonic Analysis of Apple Attributes in Metropolitan Markets of Western Canada," Agribusiness, John Wiley & Sons, Ltd., vol. 28(3), pages 293-309, June.
    19. Yue, Chengyan & Alfnes, Frode & Jensen, Helen H., 2009. "Discounting Spotted Apples: Investigating Consumersï¾’ Willingness to Accept Cosmetic Damage in an Organic Product," Staff General Research Papers Archive 12693, Iowa State University, Department of Economics.
    20. Marshall Burke & Kyle Emerick, 2016. "Adaptation to Climate Change: Evidence from US Agriculture," American Economic Journal: Economic Policy, American Economic Association, vol. 8(3), pages 106-140, August.
    21. Wendkouni Jean‐Baptiste Zongo & Bruno Larue, 2019. "A counterfactual experiment about the eradication of cattle diseases on beef trade," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 67(4), pages 379-396, December.
    22. Beck, Nathaniel & Katz, Jonathan N., 1995. "What To Do (and Not to Do) with Time-Series Cross-Section Data," American Political Science Review, Cambridge University Press, vol. 89(3), pages 634-647, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Derek Brewin & Ryan Cardwell & Alan P. Ker, 2024. "Introduction to the special issue in honor of the late Dr. James Rude," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 72(3), pages 209-211, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ridley, William & Luckstead, Jeff & Devadoss, Stephen, 2022. "Wine: The punching bag in trade retaliation," Food Policy, Elsevier, vol. 109(C).
    2. Piermartini, Roberta & Yotov, Yoto, 2016. "Estimating Trade Policy Effects with Structural Gravity," School of Economics Working Paper Series 2016-10, LeBow College of Business, Drexel University.
    3. Ridley, William & Luckstead, Jeff & Devadoss, Stephen, 2022. "Wine: The punching bag in trade retaliation," Food Policy, Elsevier, vol. 109(C).
    4. Scott L. Baier & Amanda Kerr & Yoto V. Yotov, 2018. "Gravity, distance, and international trade," Chapters, in: Bruce A. Blonigen & Wesley W. Wilson (ed.), Handbook of International Trade and Transportation, chapter 2, pages 15-78, Edward Elgar Publishing.
    5. Arribas, Iván & Bensassi, Sami & Tortosa-Ausina, Emili, 2020. "Trade integration in the European Union: Openness, interconnectedness, and distance," The North American Journal of Economics and Finance, Elsevier, vol. 52(C).
    6. Yoto V. Yotov, 2024. "The evolution of structural gravity: The workhorse model of trade," Contemporary Economic Policy, Western Economic Association International, vol. 42(4), pages 578-603, October.
    7. Mario Larch & Yoto V. Yotov, 2016. "General Equilibrium Trade Policy Analysis with Structural Gravity," CESifo Working Paper Series 6020, CESifo.
    8. Mario Larch & Yoto Yotov, 2017. "On the impact of TTIP in Southeastern and Eastern Europe: A quantitative analysis," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 54-73,74-92.
    9. Felbermayr, Gabriel & Yotov, Yoto V., 2021. "From theory to policy with gravitas: A solution to the mystery of the excess trade balances," European Economic Review, Elsevier, vol. 139(C).
    10. Scott L. Baier & Narendra R. Regmi, 2023. "Using Machine Learning to Capture Heterogeneity in Trade Agreements," Open Economies Review, Springer, vol. 34(4), pages 863-894, September.
    11. Yang, Yichen & Liu, Wen, 2024. "Free trade agreements and domestic value added in exports: An analysis from the network perspective," Economic Modelling, Elsevier, vol. 132(C).
    12. Baier, Scott L. & Bergstrand, Jeffrey H. & Clance, Matthew W., 2018. "Heterogeneous effects of economic integration agreements," Journal of Development Economics, Elsevier, vol. 135(C), pages 587-608.
    13. Thomas Steinwachs, 2019. "Geography Matters: Spatial Dimensions of Trade, Migration and Growth," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 81, March.
    14. repec:hal:cesptp:halshs-04913313 is not listed on IDEAS
    15. Adu, Raymond & Litsios, Ioannis & Baimbridge, Mark, 2022. "ECOWAS single currency: Prospective effects on trade," Journal of International Money and Finance, Elsevier, vol. 126(C).
    16. Fabio Gaetano Santeramo & Emilia Lamonaca, 2022. "On the trade effects of bilateral SPS measures in developed and developing countries," The World Economy, Wiley Blackwell, vol. 45(10), pages 3109-3145, October.
    17. Lin, Qi & Lin, Xi, 2023. "Unveiling the trade and welfare effects of regional services trade agreements: A structural gravity approach," Economic Modelling, Elsevier, vol. 127(C).
    18. French, Scott & Zylkin, Tom, 2024. "The effects of free trade agreements on product-level trade," European Economic Review, Elsevier, vol. 162(C).
    19. Heid, Benedikt & Stähler, Frank, 2024. "Structural gravity and the gains from trade under imperfect competition: Quantifying the effects of the European Single Market," Economic Modelling, Elsevier, vol. 131(C).
    20. Lionel Fontagn'e & Francesca Micocci & Armando Rungi, 2024. "The heterogeneous impact of the EU-Canada agreement with causal machine learning," Papers 2407.07652, arXiv.org, revised Feb 2025.
    21. Peter R. Herman, 2022. "Modeling complex network patterns in international trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(1), pages 127-179, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:canjag:v:72:y:2024:i:3:p:325-346. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/caefmea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.