Factors Impacting Crop Acreage Decision: A Case Study of North Dakota Agriculture


Rezwanul Parvez

Abstract


This study provides an analysis of producers’ crop planting decision behavior in response to econometric factors, the biophysical environment, and biofuel policy mandates.  Specifically, we measure the effects due to economic impacts on an area planted with corn from 1990 to 2015. We develop a crop supply response model and estimate that acres planted with corn in the state of North Dakota have increased by 1.2 million over the last twelve years. Also, the value of crop price elasticities indicates a significant impact on corn planted acreage decisions due to change in crop prices. Corn future price and ethanol price elasticities are positively impacted by corn planted acreage whereas corn planted acreage negatively impacts competitive crop price elasticities. We find that impact of climate variables on corn acreage decision is evident. We show that the inclusion of county interaction effect variables significantly improves the model parameters. Key findings also indicate that a 1% increase in soil moisture in month of May led to a 0.1486% increase in corn acreage expansion. Similarly, as maximum temperature increased during the planting season, corn planted acreage expanded significantly. Also, the total rainfall is positively correlated with corn planted acreage as expected. For example, a 1% increase in total rainfall led to a 0.2143% increase in total corn planted acreage.

Keywords


Biofuel policy, Crop choice decision, Supply response model, Price elasticity, Interaction effect, Corn acreage.

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About this article

Title

Factors Impacting Crop Acreage Decision: A Case Study of North Dakota Agriculture

Keywords

Biofuel policy, Crop choice decision, Supply response model, Price elasticity, Interaction effect, Corn acreage.

DOI

10.20448/journal.523.2018.31.16.36

Date

2018-11-29

Additional Links

Manuscript Submission

Journal

Agricultural Development
Vol 3, No 1 (2018) Page: 16-36

Online ISSN

2576-6740

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Citations

Authors & Affiliations

Rezwanul Parvez
Institutional Research & Planning Associate, Community College of Denver, Denver, CO 80217-3363
United States


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Agricultural Development

ISSN: 2576-6740



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