The value of seasonal climate forecasts for Australian agriculture

Kevin A. Parton, Jason Crean, Peter Hayman

Research output: Contribution to journalArticlepeer-review

18 Citations (Scopus)


Seasonal Climate Forecasts (SCFs) have been proposed as a method of reducing the risk associated with agricultural production. As such, their use should improve the profitability of agriculture either through increasing gains from better seasons or reducing losses in dry seasons. Australian agriculture is vulnerable to climate variability and the potential role of SCF has been recognised since the early 1980s. Since then many studies have been completed, with the majority estimating that there is positive value for farms from the use of SCFs. We set out to synthesise the results of 86 studies from 1979 to 2018 in order to draw out key lessons about the extent of value, major drivers of this value, and research gaps, with the aim of informing future investments in seasonal climate forecasting. Using descriptive statistics as a basis, the first key result was the wide range of estimates of value (from about -$21/ha/year to $258/ha/year in 2017 Australian dollars). Second, value was shown to be associated with several influences, such as the type of forecast, the agricultural activity for which the forecast was used, and method of estimating the value. Third, by using meta-analysis more precision was developed. This showed, for example, that the estimated value of experimental SCFs was on average about $29/ha/year more than an operational forecast, that SCFs used for cotton production had a mean estimated value that was approximately $34/ha/year higher than for mixed farming, and that in terms of method of estimation, farm-level analyses returned mean estimates of SCFs that were $32/ha/year less than for field-level analyses. Finally, notwithstanding the fact that many estimates have been made of the value of SCFs, there is still much research to be done. First, some 53% of the estimates concern wheat production, so that other areas of Australian agriculture remain under-represented. These other areas are worthy of further study. Second, while we show that method of analysis affects the estimates obtained for the value of SCFs, the reasons for this need to be examined further. Risk is one aspect of the method of estimation. Since SCFs are a means of combatting risk in agriculture, we suggest that some attention should be given to the method of incorporating risk into estimating the value of SCFs. Robust and transparent methods for economic valuation not only assist in the allocation of scarce resources, but also bridge the divide between science and decision makers.
Original languageEnglish
Pages (from-to)1-10
Number of pages10
JournalAgricultural Systems
Early online date01 May 2019
Publication statusPublished - Aug 2019


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