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Southwest ND leads in projected ag profits

North Dakota State University specialists note that soybeans and spring wheat are proving popular in North Dakota, as more acreage is devoted to their growth and higher profits for their harvest are being projected for 2018.

A press release issued by NDSU described the growing amount of acreage for soybeans and hard red spring wheat, the second most popular crop in the state. Soybeans will average $26 per acre, according to the olympic average over a 7-year period. (Eric Hylden / Forum News Service file photo)

North Dakota State University specialists note that soybeans and spring wheat are proving popular in North Dakota, as more acreage is devoted to their growth and higher profits for their harvest are being projected for 2018.

"I think every year producers add different crops that they can grow, and they take a look at 'em, 'should I tweak my rotation?' This year is no different," Andy Swenson, farm management specialist for NDSU, said in a phone interview. "This is what it looks like at this point in time and there's a lot of risk, especially on the revenue side."

A press release issued by NDSU described the growing amount of acreage for soybeans and hard red spring wheat, the second most popular crop in the state. Soybeans will average $26 per acre, according to the olympic average over a 7-year period. Spring wheat is projected to return $14 to $20 per acre in most regions, breaking even in the northwest and north Red River Valley regions and showing a slight loss in the south. This is still an improvement from last year's projected budget for spring wheat, Swenson said in the release, as drought concerns elevated wheat prices.

"It seemed like we were having more of a struggle in the Red River valley counties and one of the reasons is that the costs are a little bit higher," Swenson said. "Because in far eastern North Dakota, there's more tillage costs; land costs are higher."

The most favorable crop budgets were in the southwestern region, where 12 crops projected a positive return, according to the release. One reason for this was projected fertilizer use was lower as a result of last year's drought.

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"Because of the drought there was less soil nutrients used by the crop, more left in the ground," Swenson said. "The soil tests had higher amounts of nitrogen."

Spring wheat and durum wheat are looking positive in the southwest, with durum valued at $30 per acre. Area farmers may want to take note of these trends, though Swenson notes soybeans are a more high-risk crop than wheat. Canola and flax also project positive returns from about $10 to $30 in the northwestern, southwestern and north-central regions.

It isn't all good news though. The state's third largest crop, corn, may decline due to negative returns to labor and management, losses ranging from $21 to $47 per acre. Only the northwest and southwest regions, which have lower costs but higher production risks, show corn returns nearly breaking even.

Similarly, all of these projections may be slightly optimistic, as certain risk factors have been omitted.

"What we didn't account for is to try to adjust the yields due to the low soil moisture ... maybe some areas don't have much moisture reserves in the soil," Swenson said. "We used that same formula for projected yields in every region of the state."

Any projections like these ones, Swenson said, are difficult to set in stone, as weather can have a significant impact.

"Yields are really tough to predict because they are determined by weather. Prices are very tough to predict because of weather again ... yield for local weather and prices by worldwide weather," He said. "At this point in time, this is what it's looking like."

Swenson said that a perfect "apples to apples" comparison of crops is not achieved due to different levels of labor and management as well as risk. The budgets can be found online at " target="_blank">bit.ly/NDCropBudgets.

Related Topics: AGRICULTURESOYBEANS
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