Economic value of environmental and weather information for agricultural decisions – A case study for Oklahoma Mesonet

Abstract

For the past 24 years, weather information and monitoring provided by the Oklahoma Mesonet (the state’s largest weather and environmental monitoring network) has been used by many farmers across the state to optimize their farm operations and improve profitability of agricultural production.Several research studies delineated advantages of Mesonet weather information for efficient agricultural decision-making. However, these studies are mainly qualitative or conceptual, while comprehensive quantitative research in this field is still missing. This paper aims at filling this gap by quantifying the value of weather information for Oklahoma farmers in all climate regions, based on profitability analysis, USDA NASS and agricultural output statistics, as well as crop budgets from the Oklahoma Extension Center.The results show that the cumulative economic benefits for agricultural production in Oklahoma from utilizing Mesonet information (assuming the profitability factor of 3.7% and with 73% of farmers applying Mesonet) amounted to $183.1 million in 2006–2014 (combining generated profits and prevented losses in agricultural production). Mesonet information was found to provide higher annual economic benefits in terms of prevented losses than additional production profits, especially in drought years. A regional analysis for Oklahoma climate regions revealed the highest cumulative benefits of Mesonet applications in the Southwest ($45.9 million), North Central region ($38.2 million), and in Panhandle ($34.5 million) in 2006–2014. Also, high temporal variations were found for all Oklahoma climate regions.This research is focused on the agricultural sector, while it also sets the baseline for a more holistic understanding of the economic value and benefits of weather information provided by the Oklahoma Mesonet that can further be applied to other sectors in the state.