Elasticity---the responsiveness of production and consumption to price---is important to keep in mind when thinking about potential climate change impacts on agriculture. Sadly, much of the profession doing empirical work on potential climate impacts seems to ignore this part of the equation. I'm thinking particularly of this paper and this paper, both of which have other issues (see here and here).
On a global scale, supply and demand of staple commodities are highly inelastic. Demand is inelastic mainly because commodity expenditures comprise a small share of the price of most consumption goods. Supply is inelastic because there's only so many places where it makes sense to grow certain crops. As a result, commodity prices can be very sensitive to shifts in supply or demand. If climate change causes a big inward shift in supply, it could cause a huge loss in consumer surplus. But if climate change were to cause a big outward shift in supply, the welfare change would be modest.
This is a key reason why uncertainty with climate change matters: the potential downside is so much bigger than the potential upside.
Sadly, what we often see from economists are references to the tiny share of agriculture in world GDP Thomas Schelling is a famous example (he makes good points about the bargaining problem). But GDP is no welfare measure. And the difference between GDP and welfare is going to be large, mainly because it doesn't count a huge consumer surplus.
Elasticity and Climate Change
Now, it is true that a lot of the loss in consumer surplus will be offset by gains to producer surplus. The U.S., with its large land base, excellent soils and climate, produces and exports more than anyone else in the world. A doomsday scenario for food production doesn't look so bad for us--we'd be the ones gaining a lot of that producer surplus.
But in other places, particularly in certain developing countries with large urban populations, demand is not quite as inelastic. This is because the urban poor spend a large share of their income on staple food commodities, and when prices change a lot, it changes their real incomes a lot, and they spend less. So a lot of the loss in consumer surplus is likely to land on the people who most value that surplus---a dollar of surplus to a typical person in India is worth a lot more than it is to us.
A contemporary case in point: As I recall, Egypt imports about half its wheat and about half the people live on $2/day or less. Today's high wheat prices must be doing a lot of damage to their real incomes. And they are letting the world know about it.
Update: I'm not the only one thinking about commodity elasticities. I think I posted mine first. But the other guy always puts things much better than I do...
Update 2: Krugman made this issue a headline column. He's basically outlined my current research agenda.