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Prevented-planting Impacts 3.75-million N.D. Acres

The direct financial impact to North Dakota’s farmers of prevented-planted acres in 2013 is estimated at $626.9 million.

The estimate of crop acreage in North Dakota that was not planted this year is about 3.75 million acres, which is based on acreage reports farmers reported to Farm Service Agency (FSA) personnel across the state.

The direct financial impact to North Dakota’s farmers of prevented-planted acres in 2013 is estimated at $626.9 million, according to Dwight Aakre, North Dakota State University Extension Service farm management specialist.

The estimate is based on the market value of the crops that would have been produced on the acreage that was too wet to plant this year. The production estimate assumes a five-year average crop mix and yields by crop reporting district in the state. The $626.9 million is the expected revenue loss after accounting for multiperil crop insurance indemnity payments on prevented- planted acres.

“This represents loss in gross revenue, not net farm profit,” Aakre says. “Producers with prevented-planting acres will have significant cost reductions, which partially offsets revenue losses. However, businesses that sell to or buy from a producer will be greatly impacted by the reduced sales of crop inputs such as seed, fertilizer, pesticides and less grain to merchandise.”

Because of the monetary losses, farmers will not have as much money to spend on farm inputs and personal expenditures.

“Therefore, the total impact of this loss to North Dakota’s economy is considerably larger, at $1.6 billion dollars,” says Dean Bangsund, NDSU Agribusiness and Applied Economics Department research scientist. “This represents the total economic activity that would have been generated in the state’s economy if the $626.9 million of crop production would have occurred.”

The direct loss is for prevented-planted acreage only. The analysis assumed that crop yields would have been average had the prevented-planting acres been harvested.

North Dakota averaged a little more than 1 million acres of prevented-planting per year from 2000 through 2009. The record for prevented-planting was 5.6 million acres in 2011. Nearly 100 percent of the state was planted in 2012.

The survey by the FSA showed prevented-planted acres in every county. However, the majority of prevented-planted acres are north of North Dakota Highway 200. The estimated prevented- planted acres for Ward, and Bottineau counties exceeded 300,000 acres each. Cavalier, Renville and Towner counties all had more than 200,000 acres each.

NDSU Agriculture Communication – Sept. 20, 2013

Source:Dwight Aakre, (701) 231-7378, dwight.aakre@ndsu.edu
Source:Dean Bangsund, (701) 231-7471, d.bangsund@ndsu.edu
Editor:Rich Mattern, (701) 231-6136, richard.mattern@ndsu.edu
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