The 2020 crop season will bring more financial challenges for area farmers, with some crops potentially showing a net loss per acre, a new North Dakota State University Extension report finds.
Spring wheat, in particular, threatens to finish in the red in much of the state. Projections are mixed for corn and generally positive for soybeans. Spring wheat, corn and soybeans are the state’s three major, or most widely grown, crops.
The NDSU 2020 Projected Crop Budgets estimate per-acre yields, prices, expenses and potential profits for a number of crops in nine regions of the state. The popular annual projections are aimed at North Dakota producers, but they can be useful for farmers in adjacent states, too.
All the projections are just estimates. Actual per-acre gains or losses will depend on the yields and prices that individual farmers receive in the 2020 crop season.
The NDSU budgets include a projected return to labor and management, or a "payment" to the farmer for his or her labor and managerial efforts required to grow that crop. Some crops require more skill and effort than others, so the size of that payment, which factors into the projected gain or loss per acre, varies from one crop to another.
Varying yields and land prices across the state also affect the NDSU projected returns. Typically, both yields and land prices are higher in the eastern part of the state than in western North Dakota.
Here are regional examples from the 2020 report. Note that it hasn’t been unusual in recent years for some crops to project per-acre losses in the annual budgets.
In north-central North Dakota, spring wheat is estimated to have a net loss of $1.36 per acre. A per-acre gain of $28.36 for soybeans and a per-acre loss of $4.03 for corn also are forecast.
In the southern Red River Valley, or extreme southeast North Dakota, spring wheat is projected to have a loss of $34.86 per acre. A per-acre gain of $16.58 for soybeans and a per-acre gain of $1.38 for corn are estimated.
In southwest North Dakota, soybeans are projected to have a per-acre gain of $29.74. Spring wheat is pegged to have a per-acre loss of 35 cents, with corn estimated to a per-acre loss of 3 cents.
Some so-called minor crops, or ones that account for a relatively small amount of acres, are projected to do well. Dry beans look particularly promising, with sunflowers estimated to fare well in some parts of the states, according to the estimates.
Nobody expects area farmers to make major changes in their 2020 planting plans because of early profit projections.
In fact, many farmers haven’t given much thought yet to what they’ll plant in 2020. That reflects the difficult 2019 harvest, in which some farmers are still struggling to combine corn or sunflowers, said Jeff Mertz, a Hurdsfield, N.D., farmer and president of the North Dakota Grain Growers Association.
More significantly, farmers generally stick to a crop rotation, which limits their ability and desire to switch between crops, Mertz said.
Few farmers alter their mix of crops radically from year to year. Producers generally have a set rotation in which they alternate a handful of crops on a particular field to minimize problems with disease and insects, among other reasons.
For example, including wheat in a rotation provides agronomic benefits to a field that makes the crop more attractive to plant, even if the projected return for return isn’t positive.
“It’s good to stick pretty close to your rotation,” Mertz said, adding that farmers in the state generally have good results growing wheat.
Even so, farmers generally have some "flex" or "discretionary" acres on which they can switch crops, depending on prices.
It’s much too early to predict how farmers will adjust their flex acres next spring, Mertz said.
Asked about the 2020 crop outlook, Mertz said, “Every year brings challenges, and I’m sure we’ll have them (in 2020, too). But farmers find ways to persevere.”
To see the projected NDSU crop budgets: https://www.ag.ndsu.edu/farmmanagement/crop-budget-archive.