Climate change and climate variability have a type of "domino effect" that makes its way through the agricultural sector. As the agricultural resources are changed, production must incur some adjustments which then alters the economics. Due to this "trickle down" nature it is important to first understand the impacts on the land and water resources and their impact on production and finally it is possible to begin looking at the effect of economics. At this time concentration is focused on better understanding the impacts of climate variability and change on the resources and production. It can be seen, however, that the agricultural economics change in two main ways. As the resources change, policies may change that could effect the operational costs such as an increase in cost of irrigation permits, increase in gasoline prices and so forth. In addition, a decrease in agricultural resources could result in a change in production as well as facilitate changes in management practices that drastically alter production costs. Before any speculations can be made, a thorough understanding of the impacts climate change and variability have on the natural resources and production must be understood.