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February 17, 2005 Soybeans in North Dakota - Will the Trend Continue?
A good trivia question for your cousin in Illinois: “What is the biggest soybean county in the United States?” The answer is Cass County in North Dakota, which has lead all U.S. counties in soybean acreage for nine consecutive years. It also had the highest total production from 2001 to 2003 (county production numbers are not available for 2004). Its neighbor, Richland County, was No. 2 in the country for soybean acreage during the past three years. The statistics go beyond Cass and Richland. In 2003, six of the top 20 soybean counties in the nation, by acreage, were in North Dakota. LaMoure County produced the same number of bushels as the entire state of Georgia, and Stutsman County had more than all of Texas. Therefore, why isn’t North Dakota the No. 1 state in soybean production? It has improved, going from 19th in 1994 to 10th in 2003, but climate conditions, such as low rainfall and/or short, cool growing seasons, make the western half of the state and much of the north unsuitable for soybean production. In fact, production historically has been concentrated in small portion of the state, the southeast corner. Until 1996, Cass and Richland counties accounted for two-thirds of the state’s acreage. Although soybean plantings in these two counties have increased greatly, they now represent only 20 percent to 25 percent of the North Dakota total. The “core” soybean region has expanded two counties west and north of Cass and Richland counties. The most startling example is Stutsman County, which went from 1,300 acres in 1995 to 300,000 acres in 2004. This should make it the fifth largest soybean county in 2004, by acreage, in the United States. Barnes County was probably the fourth largest. This gives North Dakota four of the top five. What crops have soybeans displaced? Barnes County, to the west of Cass County, provides a good example. From 1995 to 2004, wheat acres halved, from 354,000 to 173,000 acres. Drastic acreage cuts also occurred with sunflowers, dropping from 163,000 to 21,000 acres, and barley going from 105,000 to 25,000 acres. Soybeans zoomed to the top spot, going from 11,000 to 300,000 acres. That’s approximately 50 percent of the total plantings, while corn increased from 11,000 to 77,000 acres. Wheat is no longer king in the new core soybean production area of North Dakota. Profit is why we are seeing the increase in soybean production. Relative yields have been the driver. For example, there has been a 50 percent increase in Barnes County soybean yields, comparing the 1984 through 1993 average yield of 21 bushels with the next 10 years, 1994 through 2003, which had an average of 32 bushels. Wheat experienced a meager 3 percent increase in yields, from 34 to 35 bushels, during the same periods. Soybeans yields are increasing much faster than wheat, costs of production are similar, prices are typically 50 percent higher, the loan rate provides a better safety net and there is much less worry about poor quality and associated price dockage. In addition, weed management has been simplified with genetically modified glyphosate-resistant soybeans and a soybean and small-grain rotation has synergies in pest control and the use of labor and machinery. In several counties, it was not a tough decision. However, the overriding factor is weather. Will soybean acreage continue its upward ride in 2005? Probably not. In 2004, the string of good soybean weather broke and the average yield plummeted to 23 bushels, the lowest in 11 years. Conversely, wheat yields were the second highest in history. However, I expect that soybean acreage in the old and new core production areas to hold fairly steady. One summer of near-record cool temperatures is not a trend. Soybeans budgets, using seven-year average yields, project a better profit than small grains. Corn acres probably will decline and some will switch to soybeans. Sunflower and dry bean profits look very good because of strong prices, but producers who have dropped sunflowers in favor of soybeans may be reluctant to switch back because of pest management concerns, especially in areas where birds can be a problem. More than one producer has said he doesn’t reminisce about birds descending on a ripe sunflower field. However, soybeans will decrease in fringe production areas. In the north-central and parts of northeastern North Dakota, there will be a shift to crops that project better profits, such as sunflowers, dry beans, flax and field peas. In summary, North Dakota has experienced a dramatic increase in soybean acreage: more than 3 million acres in 10 years. Soybean production costs are lower in North Dakota than in the Corn Belt. Foster County, which is on the western edge of the new core soybean region, had the lowest cost of production per unit in North Dakota in 2003 and maybe the entire country. Yields in Foster County were slightly higher than in the Red River Valley and costs, particularly land, were less. However, land costs have been racing upward in the new core soybean production region. Why move to Brazil when you can raise soybeans in the Dakotas? ### Source:
Andy Swenson, (701) 231-7379, aswenson@ndsuext.nodak.edu |
Market Advisor: |
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North Dakota State University |
