Vol 3 No 1 (2018)
Articles

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

Rezwanul Parvez
Institutional Research & Planning Associate, Community College of Denver, Denver, CO 80217-3363, USA
David C Roberts
Associate Professor, Department of Agri-business & Applied Economics, Richard H. Barry Hall 544, North Dakota State University, Fargo, ND 58108, USA
David Ripplinger
Assistant Professor, Department of Agri-business & Applied Economics Richard H. Barry Hall 614D,North Dakota State University, Fargo, ND 58108, USA
Published December 20, 2018
Statistics
69 Views | 12 Downloads
Keywords
  • Biofuel policy, Crop choice decision, Supply response model, Price elasticity, Interaction effect, Corn acreage.
How to Cite
Parvez, R., Roberts, D., & Ripplinger, D. (2018). Factors Impacting Crop Acreage Decision: A Case Study of North Dakota Agriculture. Agricultural Development, 3(1), 16-36. https://doi.org/10.20448/journal.523.2018.31.16.36

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.