Step 1: Concept Biogas production is highly temperature-dependent because it relies on bacterial activity.
Step 2: Meaning Most methanogenic bacteria thrive in mesophilic ($25-40^{\circ}$C) or thermophilic ($45-60^{\circ}$C) conditions.
Step 3: Analysis As temperature drops, the metabolic rate of these bacteria slows down significantly. When temperatures fall below $20^{\circ}$C, the bacteria become largely inactive, causing a steep decline in gas production.
Step 4: Conclusion Production drops sharply below $20^{\circ}$C.
Final Answer: (D)