Livestock management at northern latitudes: Potential economic effects of climate change in sheep farming

•The economy and ecology of sheep farming under future climate change scenarios are studied.•Focusing on spatial effects•Bioeconomic sheep modeling

We study the economy and ecology of sheep farming under future climate change scenarios. The analysis is at the farm level and includes two different categories of the animals, ewes (adult females) and lambs with a crucial distinction between the outdoor grazing season and the winter indoor season. The model is formulated in a Nordic economic and biological setting. During the outdoor grazing season, animals may experience growth constraints as a result of limited grazing resources. The available grazing resources are determined by animal density (stocking rate) and weather conditions potentially affecting the weight, and hence, the value of lambs. Because empirical evidence suggests that climate changes, e.g., increased temperature, have contrasting effects on lamb weights depending on the location of the farm, the spatial effects of such changes are analyzed.