Progress 10/01/12 to 11/30/16
Outputs
Target Audience:The target audiences for the annual land market research efforts were lenders, farmland owners and renters, land investors, legislators and other policy makers, and students in South Dakota and surrounding states. These audiences were reached through the annual land market report (paper copy and internet), news releases and presentations to several organizations including farm management/ appraisal organizations, bankers groups, and realty companies, Extension workshops and SDSU classroom presentations. The target audiences for detailed econometric analysis of agricultural land market trends and analysis of alternative flexible crop leasing arrangements were professional economists and agricultural scientists. These audiences were reached through conference presentations, professional papers and posters at AAEA, WAEA and similar professional meetings. The target audiences for economic assessment of crop management practices and range management practices were top producers, agricultural scientists, economists, and federal conservation officials were reached through one journal article, research reports, an I-GROW soybean management book chapter, and professional paper or poster presentations to various organizations (WAEA AAEA and NRCS sponsored meetings are examples). The target audiences for the conservation assessment project (CEAP) were mainly professional scientists, agricultural economists, and federal conservation officials interested in the topics. These audiences were reached through two journal articles, research reports and professional paper presentations to various organizations including AAEA and NRCS sponsored conferences. The target audiences for the farm land use decision analysis are professional agriculturists, conservation groups, farmers and ranchers, and state / federal conservation and environmental agencies, and state / federal policymakers. These groups were reached through initial presentations and publications from the survey results reported in two Master's theses. An Economics Commentator summary of key results was also mailed to all 1026 producer respondents to the survey. Presentations at professional conferences (AAEA and American Grasslands Conference) and webinars were also used to reach professional agricultural and conservation audiences. Also, two journal articles were prepared for publication in 2016 to reach professional economists and other research /policy analysts in academic, nonprofit, and several governmental organizations such as USDA-NRCS, USDA-ERS, and USFWS Changes/Problems:Due to Dr. Janssen's retirement, the termination report for this Hatch Project is one year earlier (November 2016) than the project termination date of September 30, 2017. What opportunities for training and professional development has the project provided?Five graduate students completed their Master's thesis on topics directly related to this Hatch project. These students and their completion date for their thesis were: K. Bhattarai (2014), N.K. Chowdhury (2014), B. McMurtry (2015), M. Luri (2015) and Md. Chowdhury (2016). Each student also co-authored at least one research report or professional conference paper and three students were also involved as a co-author of a published journal article or journal article submission. One graduate student per year worked on the annual farmland survey project. Two undergraduate students, advised by Dr. Janssen, completed Honors College independent studies on farmland market topics. Finally, one graduate student (M. Luri) worked with several professors in all stages of survey instrument development for the Farmland Use Decisions in the Dakotas 2015 survey. How have the results been disseminated to communities of interest?The annual research report on farmland values and rental rate trends are widely disseminated via I-GROW, other internet sites, and publication of 400 - 500 paper copies. Dr. Janssen made several presentations to several realty, banking, agricultural business and professional appraisal organizations in South Dakota and Minnesota. SDSU Extension Economics specialists also use the annual report materials in their education workshops. The annual research report is also used in various SDSU class projects including a rural appraisal, agricultural law, and agricultural finance courses. Economics Commentator or Extension I-Grow articles were published annually for general audiences. Many of these articles are also included in news magazine and other media releases that reach a much wider audience. Reports on alternative grazing systems was disseminated by Dr. Janssen to professional agricultural economists while the agronomists and range scientists on the project used it to disseminate it to ranchers interested in intensive grazing systems. Topics related to cropland management practices - no-till and conventional tillage rotations- and to flexible leasing practices were disseminated to agricultural scientists and economists by conference paper presentations, research reports, and a journal article. A chapter was also written for an I-GROW soybean production book published by SDSU. Economic results from the conservation assessment project (CEAP) was disseminated to agricultural scientists, economists, and conservation professionals by conference paper presentations, research reports, and two journal articles. Key results from the Farmland Use Decisions survey in the Dakotas was first presented at the 3rd biennial America's Grassland Conference, a network of scientists, conservationists, agribusinesses, ranchers interested in grassland conservation and management and published in a proceedings issue. The Economics Commentator summarizing key results from this survey was mailed to all 1026 producers responding to the survey and disseminated to various agricultural / conservation news media, webinars, and magazines. In 2016, emphasis was on development and submission of two journal articles containing more detailed analysis and implications of project findings. What do you plan to do during the next reporting period to accomplish the goals?
Nothing Reported
Impacts
What was accomplished under these goals?
Accomplishments related to the first objective include: (1) providing annual updates of agricultural land values, cash rental rates, and rates of returns by major land use and by sub-state regions of South Dakota, and (2) Analysis of factors explaining long-term land market trends. 1. The annual SD farmland market survey has been conducted from 1991 - 2015, providing a detailed 25 year history of land market trends. From 2014 to 2015, all-agricultural land values increased 1.4% compared to 6.1% from 2013 to 2014 and increases varying from 16.5% to 33.6% in the three previous years. From 2014 to 2015, cropland values declined 4.8% while rangeland and pasture increased more than 10%. Substantial declines in crop prices and major increases in cow-calf prices explained the different results. Cash rental rates, a proxy for net returns to land, changed in the same direction as land values for each land use in each region. Average rates of cash returns to land remained very low from 2013 - 2015, 3.4% for cropland and 3.0% for rangeland. From 1991 to 2014, land values increased more rapidly than the rate of general price inflation in all regions of South Dakota, with statewide average annual rates of increase between 10% and 11% during this 24 year period. Continued increases in cash rental rates provided underlying support for increased land values during this period. These basic economic factors along with relatively low mortgage interest rates (since 2004) attract interest in farmland purchases by investors and by farmers expanding their operations. Factors affecting cash rents and land values in South Dakota included technology changes favoring expansion of corn and soybeans in the Dakotas, rapid development of ethanol production in SD, and persistence of farm expansion, via land purchase or leasing, as a major response to economies of size. 1. Econometric analyses of key factors affecting cropland values and rental rates from 1994 - 2008 in South Dakota were conducted using county-level annual data. Results showed: (10 cropland cash rental rates were largely predicted from lagged (previous year) crop revenue with r=0.76, and (2) deflated cropland value per acre as estimated from four key explanatory variables: predicted cash rent (+0, corn revenue as percent of total crop revenue (+), county population density (+), and deflated farm mortgage interest rates (-). Accomplishments related to the second objective on conducting an economic evaluation of ag land management practices are divided into four key components: (3) economic analyses 12 long-term crop rotations, (4) economic assessment of conservation practices in the Bad River basin, (5) economic assessment of alternative grazing management practices, and (6) detailed analyses of farmland use decisions in the Prairie Pothole regions (PPR) of South Dakota and North Dakota. Major grant funding from commodity groups, USDA NRCS-CEAP, and USDA NIFA made it possible to expand projects covered under this objective. 2.The economic value of the conservation practices adopted from 1990 - 2004 on sediment reduction in the Lower Bad River basin of South Dakota was estimated based on sediment reduction estimates of 36% to 38% due to conservation practices (BMPs) adopted. The estimated cost of adopting the BMPs was $7.8 million (in constant 2000 $). Over a projected 15 year benefit life from 2005 - 2019, the estimated value of sediment reduction is $19.8 million, using a $2.13 per ton value of sediment reduction. Another study summarized key economic results from 10 different no-till (NT) crop rotations and two conventional (CT) corn-soybean rotations based on agronomic data (2001 - 2012) from long term crop rotation experiments conducted by the NC Ag Research Center near Brookings, SD. Results indicate: (1) the CT rotations had the highest average net returns but higher risks were also involved, (2) several four-crop NT rotations were preferred as producer risk aversion increased, and (3) crop diversification is a key risk management tool. The economic performance assessment of 12 different crop rotations provides key data for crop producers and agronomists in eastern SD. Key results from an economic simulation modeling study of four different grazing systems were: (1) rotation grazing system 4-PR-2 in which cattle pass through each paddock twice had the highest net returns, (2) the high intensity short-duration (mob grazing) system was the least preferred system per acre when risk was not considered, (3) when risk aversion increases, mob grazing system is the third most preferred system, (4) a risk neutral producer would need a risk premium of $23 to $80 per animal to switch to mob grazing. The performance data was collected in a 4-year (2011 - 2014) grazing study at the UNL Barta ranch in the Nebraska Sandhills and combined with economic cost data from western SD ranches. The Farmland Use Decision 2015 survey completed by 1026 producers (36% response rate) in 57 counties of the PPR of the Dakotas was developed to obtain data on their:(1) recent and projected land use patterns, (2) land use conversion (grass to crop/ crop to grass), and (3) views on the main drivers of land use change and conversion. Producer perspectives are important in understanding the dynamics of land use change and major factors influencing these principal decision makers. Key findings are listed below. The average farm size per respondent was 1226 cropland acres and a total of 1686 acres operated. Most of the remaining acres were tame or native grassland. Almost all producers had some cropland, while three-fourths also had some pasture or rangeland. Nearly 90% of respondents raised corn and/or soybeans during the past 10 years. 2. During the past 10 years, the grass to crop conversion rates (as percent of 2014 cropland acres) was 7.2% in both states, with more CRP grass conversion in North Dakota and more tame / native grass conversion in South Dakota. There is also some conversion from crop to grass, primarily from new CRP or WRP enrollment or post-CRP land use remaining in grass. The overall net conversion rate of grass to cropland was 4.9% of 2014 cropland acres with most land conversions occurring in the central regions of both states. 3. Overall, 40% of respondents converted some grassland to cropland use in the past 10 years, with converted grassland averaging 13 - 14% of their 2014 cropland aces. Based on survey results and logistic regression analyses land use conversion decisions in the study regions were more likely made by respondents 1) that expanded their land operation, in terms of acres operated during the past 10 years, 2) that currently operate more than 2000 acres and have gross farm sales exceeding $500,000, and 3) who are less than 50 years old. Respondents ranked the relative importance of 10 different driving forces that impacted their land use decisions in the past 10 years. Changing crop prices (50% of responses) was the most important driving force, followed by changing crop input prices (15%), increased crop yields (11%) and weather / climate factors (7%). The other six driving forces were only 17% of responses. Logistic regression results indicate the increasing importance of crop output prices, crop input costs, innovation in crop equipment and weather patterns on land use decisions as one moves north toward the economic margin. Consistent with human capital theory, older operators are generally less responsive to factors affecting land use, while increased farm size is closely related to making land use conversion decisions based on policy issues and technology innovations. Overall, the main results from this 2015 survey highlights the widespread extent of producer participation in both changing land use patterns and land conversion occurring in the PPR. The other highlight is the importance of economic and technology factors on producer decisions concerning land use and land conversion.
Publications
- Type:
Journal Articles
Status:
Published
Year Published:
2016
Citation:
Parvez, R; N.K.Chowdhury, L.L. Janssen, A. J. Smart, R.G. Stover, B.D. Madurapperuma, D. Ripplinger. 2016. Environmental benefits estimation and assessment of conservation practices: a novel approach. Global Journal of Agricultural Economics, Extension and Rural Development. Vol 4(3), pp. 399 409. June 2016.
- Type:
Conference Papers and Presentations
Status:
Published
Year Published:
2015
Citation:
Janssen, L.; M. Luri, Md. Chowdhury, H. Feng, D. Hennessy. 2016. Farmland Use Decisions and Grassland Conversion in the Dakota: 2015 Survey and Analysis. IN Americas Grassland Conference: Partnerships for Grassland Conservation. Proceedings of the 3rd Biennial Conference on the Conservation of Americas Grasslands. Sept. 29- Oct. 1, 2015, Fort Collins, CO. Washington DC: National Wildlife Federation. Pp. 12 15.
- Type:
Theses/Dissertations
Status:
Published
Year Published:
2016
Citation:
Chowdhury, Niaz. 2016. Investigating Grassland and Cropland Conversion Decisions in the Dakotas, 2015 Producer Survey and Analysis. M.S. Thesis: Economics Dept. South Dakota State University, Brookings, SD
- Type:
Journal Articles
Status:
Under Review
Year Published:
2016
Citation:
Wang, Tong; Moses Luri, Larry Janssen, David A. Hennessy, Hongli Feng, Michael Wimberley, Gaurav Arora. 2016. Determinants of Motives for Land Use Decisions at the Margin of the Cornbelt. Ecological Economics.
- Type:
Journal Articles
Status:
Under Review
Year Published:
2016
Citation:
Parvez, R.; L. Janssen, A. Smart, R. Stover, N.K. Chowdhury. 2016. Assessing Producer Perception and Conservation Attitudes on Agro-Environmental Conditions of South Dakota. Journal of the American Society of Farm Managers and Rural Appraisers.
- Type:
Journal Articles
Status:
Submitted
Year Published:
2016
Citation:
Wimberley, M.; L. Janssen, D. Hennessy, M. Luri, Md. Chowdhury, H. Feng. Nov. 2016.
Agricultural Land Use Change and Grassland Loss in the Eastern Dakotas: a Farm-Level Analysis. Land Use Policy Journal
|
Progress 10/01/14 to 09/30/15
Outputs
Target Audience:The target audience for the annual land market research efforts were lenders, farmland owners and renters, land investors, legislators and other policy makers, and students in South Dakota and surrounding states. These audiences were reached throught the annual land market report (paper copy and interest), news releases and presentations to several organizations including farm management/ appraisal organizations, bankers groups, and realty companies, Extension workshops and SDSU classroom presentations. the target audiences for the land use decision analysis are professional agriculturists, conservation groups, farmers and ranchers, and state / federal conservation and environmental agencies, and state / federal policymakers. These groups were reached through initial presentations and publications from the survey results reported in two Master's theses. Presentations at professional conferences (AAEA and American Grasslands Conference) and webinars were also used to reach professional agricultural and conservation audiences. Changes/Problems:Dr. Janssen will retire at the end of December 2015. The annual farmland market report for 2016 will be directed by two SDSU Extension Economists. Dr. Janssen will continue to work with team members on the NIFA grant "Adaptation of Agroecosystems to Climate Change at the Edge of the Cornbelt" and complete ongoing work projects for most of 2016. A termination report for this Hatch Project will be based on an end date of Sept. 30, 2016 instead of Sept. 30, 2017. What opportunities for training and professional development has the project provided?Two graduate students completed their Master's thesis in 2015 from research work conducted on this project and related grants. One additional graduate student is nearly finished with his research topic on investigating grassland and cropland conversion decisions in the Dakotas funded by the NIFA grant related to this Hatch project. One graduate student co-wrote a selected paper for the 2015 AAEA / WAEA meetings that was presented by myself. Two graduate students helped with writing an Economics Commentator that summarized key results from the Farmland Use Decision Survey in the Dakotas. This newsletter was mailed to all 1026 respondents and made available to various news / magazine media. Another graduate student worked with me on the annual farmland survey project. How have the results been disseminated to communities of interest?The annual research report on farmland values and rental rate trends are widely disseminated via I-GROW and other internet sites. Dr. Janssen made presentations on farmland topics to several agricultural business / professional organizations in South Dakota and Minnesota. ESDSU Extension Economics specialists also use the annual report materials in their education workshops. The report is also used in various class projects, including a rural appraisal course. The report on alternative grazing systems was mainly disseminated by this author to professional agricultural economists while the agronomists on the project used it to disseminate it to ranchers interested in intensive grazing systems. Key results from the Farmland Use Decision survey in the Dakotas was first presented at the 3rd biennial America's Grassland Conference, a network of scientistis, conservationists, agribusinesses and ranchers interested in grassland conservation and management and published in their proceedings issue. The Economics Commentator summarizing key results from this survey was mailed to all 1026 producers responding to the survey and disseminated to various agricultural / conservation news media and magazines. What do you plan to do during the next reporting period to accomplish the goals?Dr. Janssen is retiring in December 2015, but will work with the remaining graduate student until the thesis is completed. Heis currently working withother team members on the NIFA grant on one proposed journal article and possibly a second article connecting the survey results to non-survey data, such as satellite land image data on land use change in the Dakotas. He will also assist team members with development of posters or professional meeting papers related to the NIFA grant project. Two Extension Economists are taking over the annual land market project for 2016 and potentially additional years. Dr. Janssen plans to finish a research report that summarize the 25 years of key results from the annual farmland market project that he led for the entire time period.
Impacts
What was accomplished under these goals?
The project involves conducting an annual survey of agricultural land values and cash rental rates in South Dakota. Detailed information on land values and cash rental rates is annually reported for cropland, hay land, pasture, and rangeland by sub-state region from 1991 - 2015, providing a detailed 25 years history of regional and statewide trends. During the past year, from 2014 to 2015, all-agricultural land values increased 1.4% compared to 6.1% from 2013 to 2014 and increases varying from 16.5% to 33.6% in the three previous years. Cropland values declined 4.8% this past year, while rangeland and pasture increased more than 10%. Substantial declines in crop prices and major increases in cow-calf prices are the primary explanations for the different results. Cash rental rates from cropland and hay land declined statewide and in most regions, while cash rental rates for pasture / rangeland increased. The opposite trends in cash rental rates reflect the commodity price trends for crops vs. cow-calf and provide underlying support for the land value changes. Current average rates of cash returns on agricultural land remain very low, averaging 3.4% for cropland and 2.6% for rangeland. The booming market psychology of recent years is being replaced with growing concern on adjusting cash rental rates and land prices downward to declining commodity prices and lower prospective returns, especially for cropland and hay land. An economic assessment of four different grazing systems was conducted based on performance data from 2011 - 2014. The grazing systems examined were two rotational systems, a continuous system and a high-intensity short-duration (mob grazing) systems based on data collected from UNL Barta Ranch near Rose, Nebraska. Using the performance data and other cost data relevant to the South Dakota and Nebraska, budgets were set up for each grazing system and extrapolated to a 160 acre (64 ha) pasture. Profit, measured as returns to labor and management, and risk were measured for each replication of each system per year and risk premiums were calculated. Key results were: (1) rotation grazing system 4-PR-2 in which cattle pass through each paddock twice had the highest net returns, (2) the mob grazing system was the least preferred system per acre when risk was not considered, (3) when risk aversion increases, mob grazing system is the third most preferred system, (4) a risk neutral producer would ned a risk premium of $23 to $80 per animal to switch to mob grazing. The Farmland Use Decision 2015 survey of producers and landowners in the Dakotas was developed to obtain data on their: (1) recent and projected agricultural land use patterns, (2) land use conversion (grass to crop/ crop to grass), and (3) views on the main drivers of land use change and conversion. The perspectives of agricultural producers is especially important if we wish to understand the dynamics of land use change and the major factors influencing these principal decision makers. The study region consists of 37 counties in South Dakota and 20 counties in North Dakota located in the Prairie Pothole region (PPR) where: (1) corn, soybeans and wheat are the dominant crops, and (2) considerable land use change and land use conversion has occurred in the past 10 - 20 years. The mail survey was conducted in March and April of 2015. Data collected from 1026 producer respondents (36% response rate) are the basis of this study. Respondents provided considerable information on land use change and conversion decisions made in the past 10 years. Key findings are listed below. The average farm size per respondent was 1226 cropland acres and a total of 1686 acres operated.Most of the remaining acres were tame or native grassland. Almost all producers had some cropland, while three-fourths also had some pasture or rangeland. Farmers in the study region operated more acres of cropland, corn and soybeans compared to 10 years earlier. Nearly 90% of respondent producers raised corn and/or soybeans each year during the past 10 years. Corn and soybean acres have also increased on a majority of the farms in this time period. Nearly half of respondent producers adopted or increased their use of no-till crop systems. During the past 10 years, the grass to crop conversion rates (as percent of 2014 cropland acres) was 7.2% in both states, with more CRP grass conversion in North Dakota and more tame / native grass conversion in South Dakota. Grassland to cropland conversion is more common in the central regions of both States, compared to the eastern regions. Most of the converted grassland was planted to corn or soybeans. There is also some conversion from crop to grass, primarily related to new CRP or WRP (Wetland Reserve Program) enrollment or post-CRP land use remaining in grass for hay, grazing or wildlife habitat. Most of the crop to grass conversion is also occurring in the central regions of both states. Overall, the net conversion rate of grassland to cropland was 4.9% of 2014 cropland acres. Overall, forty percent of respondents had converted some grassland to cropland use in the past 10 years, with converted grassland averaging 13 - 14% of their 2014 cropland aces. Based on survey results, land use conversion decisions in the study regions were more likely made by respondents with the following characteristics: 1) those that expanded their land operation, in terms of acres operated during the past 10 years, 2) those that currently operate more than 2000 acres and have gross farm sales exceeding $500,000, and 3) those who are currently less than 50 years old. Comparatively few producers have plans to convert land use from grass to crop use (6.5% of respondents) or from crop to grass use (12.6% of respondents) in the next 10 years. Respondents were asked to rank the relative importance of 10 different driving forces that affected their land use decisions in the past 10 years. Most of the driving forces can be grouped into economic, technology change, policy and environmental factors Changing crop prices was the most important driving force influencing land use decisions. One-half of all respondents indicated increased crop prices was the single most important factor behind their land use decisions, especially conversion decisions. Changing input prices (for seed, fertilizer, chemicals etc.) and increased crop yields (for reasons other than seed traits) were the second and third most influential impact factors. These two factors were selected by a total of 26% of all respondents. Changing weather / climate ranked 4th in terms of percent of respondents selecting this item as their most influential decision factor. However, only 6.9% of respondents selected this item as their most important decision factor. Based on respondent comments, this factor may reflect the extent to which some farmers encountered flood or drought issues. More efficient crop equipment, pest management practices and crop insurance factors were the next items listed. The other factors in the list including labor availability problems, availability of drought tolerant seed, and improving wildlife habitat were not often ranked as important in most of their land use decision making. An exception is that "improving wildlife habitat" was ranked high by those converting some cropland tracts to wildlife compatible uses of crops, grass and shrubs. Overall, the main results from this 2015 producer survey highlight the widespread extent of producer participation in both changing land use patterns and land conversion occurring in the PPR. The other highlight is the importance of economic and technology factors on producer decisions concerning land use and land conversion.
Publications
- Type:
Conference Papers and Presentations
Status:
Accepted
Year Published:
2015
Citation:
Janssen, Larry; Bronc McMurtry, Matthew Stockton, Alexander Smart, and Sharon Clay. 2015. An economic analysis of high-intensity, short-duration grazing systems in South Dakota and Nebraska. Selected paper presentated to joint annual meetings of AAEA and WAEA. San Francisco, CA. July 26 - 28.
- Type:
Conference Papers and Presentations
Status:
Published
Year Published:
2015
Citation:
Janssen, Larry; Moses Luri, Md. Chowdhury, Hongli Feng, David Hennessy. 2015. Farmland use decisions and grassland conversion in the Dakotas, 2015 survey and analysis. American Grassland Conference Presentation and Proceedings.
- Type:
Other
Status:
Published
Year Published:
2015
Citation:
Janssen, Larry; Moses Luri, Md. Chowdhury, Hongli Feng, David Hennessy. 2015. Farmland use decisions in the Dakotas: key results from the 2015 producer survey. SDSU Economics Commentator No. 557. Brookings, SD: Econ Dept. Nov. 20
- Type:
Other
Status:
Published
Year Published:
2015
Citation:
Brown, Henry; Larry Janssen, Matthew Diersen, Evert Van der Sluis. 2015. The structure of South Dakota agriculture: 1935 - 2012. SDSU Economics Research Report 2015-1. Sept.
- Type:
Other
Status:
Published
Year Published:
2015
Citation:
Janssen, Larry; Jack Davis and Sarah Inkoom. 2015. South Dakota agricultural land market trends, 1991 - 2015. (03-2007-2015. Brookings, SD: SD Ag. Expt. Station. May
- Type:
Journal Articles
Status:
Published
Year Published:
2015
Citation:
Smart, A.: D.E. Clay, R. Stover, M. Parvez, K. Reitsma, L. Janssen, N. Troelstrop, S. Burkhard, and E.M. Mousel. 2015. Persistence wins: Long-term agricultural conservation outreach pays off. Journal of Extension. Vol. 53(2).
- Type:
Theses/Dissertations
Status:
Published
Year Published:
2015
Citation:
McMurtry, Bronc. 2015. An economic analysis of high-intensity, short-duration grazing systems in South Dakota and Nebraska. M.S. Thesis: Economics Department. South Dakota State University. Brookings, SD.
- Type:
Theses/Dissertations
Status:
Published
Year Published:
2015
Citation:
Luri, Moses. 2015. Drivers of agricultural use change and management decisions in the Dakotas" the influence of climate and other factors. M.S. Thesis: Economics Dept. South Dakota State University, Brookings, SD
|
Progress 10/01/13 to 09/30/14
Outputs
Target Audience: The target audience for the annual land market research efforts were lenders, farmland owners and renters, land investors, legislators and other policymakrers, and students in South Dakota and surrounding states. These audiences were reached through the annual land market report (paper copy and internet), Economics Commentator, Nine I-GROW land market articles co-authored with Dr. Kim Dillivan, news releases, presentations to various organizations, Extension workshops, and SDSU classroom presentations. The target audiences for detailed econometric analysis of agricultural land market trends and assessment of crop management practices were agricultural scientistis, economists, and federal conservation officials were reached through research reports and professional paper or poster presentation to various organizations (WAEA, AAEA meetings are examples). Changes/Problems:
Nothing Reported
What opportunities for training and professional development has the project provided? Two graduate students completed their Master's thesis in January 2014 from research work conducted on this project and related grants. Two additional graduate students are currently working on their thesis topic based on research work related to this project and grants. Two graduate students co-wrote and co-presented selected papers or posters at professional meetings in 2014, while a third graduate student co-wrote a professional paper that was presented by myself. One graduate or undergraduate student per year works on most components of the annual farmland survey project. How have the results been disseminated to communities of interest? The annual research report and Economics Commentator report on farmland valuations and rental rate trends are widely disseminated via I-GROW and other internet sites. Dr. Janssen and other also make presentations on farmland market issues to various local / regional conferences of appraisers, bankers, agri-professionals, and to the SDSU Foundation. This past year, Dr. Kim Dillivan, with assistance from Dr. Janssen,wrote nine I-GROW articles related to South Dakota land market trends and issues from 2009 - 2014. These materials were used by various Extension professionals. Topics related to flexible leasing of cropland, crop management practices - no-till and conventional tillage rotations, and conservation practice assessment were disseminated to agricultural scientists and economists by conference paper, presentations, research reports, and a journal article. What do you plan to do during the next reporting period to accomplish the goals? The 25th annual survey of SD farmland markets and rental rates will be conducted and results disseminated. Research efforts using the farmalnd market database from 1991 to present will continue to be empasized in terms of empirical work and progess in publishing research reports based on this work. Dr, Janssen continues working with multidiscriplinary teamsonagricultural conservation assessment (CEAP) and grazing land management practices and plans to complete preparation of publications related to these projects. A Master's thesis and research paper will be completedin 2015from the grazing land management project. Major efforts in 2015 will be directed toanalyzing and reportingresults from theNIFA funded survey on Farmland Use Decisions in the Dakotas.Completion of this survey analysis and reporting accomplished the third objective of the multi-state andmulti-disciplinary project on "Adaptation of Agroecosystems to Climate Change at the Edge of the US Cornbelt-Assessing Different Drivers in a Spatially Explicit Network of Infrastructure." A Master's thesis and research paper willbe completed in 2015 from this project. The outcomes of this project will supply considerable information for use in the other three major objectives of this NIFA grant.
Impacts
What was accomplished under these goals?
The project involves conducting an annual survey of agricultural land values and cash rental rates in South Dakota. Detailed information on land values and cash rental rates is annually reported for cropland, hay land, pasture, and rangeland by sub-state region from 1991 - 2014, providing a detailed 24 year history of regional and statewide trends. During the past year, from 2013 to 2014, agricultural land values increased 6.1% compared to annual percentage increases varying from 16.5% to 33.6% in the previous three years. The moderation in land price is declining prices, since June 2013, for major crops and prospects for reduced farm sector incomes. Cash rental rates also increased from 2013 to 2014, but at a slower rate than during the previous three years. Increasing cash rents continue to provide underlying support for increase land values. Current average rates of cash renturn on agricultural land in South Dakota remain very low, averaging 3.2% for cropland and 3.3% for rangeland. An economic assessment of flexible crop leasing was conducted using a Flex Rent modeling approach. Net returns from various flexible leasespecificationwere compared to cropshare lease arangementsand fixed cash leases for cropland used for raising corn and soybeans in east-central, centraland southeast regions of South Dakota from 1996 - 2012. Results showed that flexible leases generated higher average returns to both landlord and tenant in several years relative to fixed cash leases. An economic assessment of alternative grazing management systems in the Nebraska Sandhills from 2011 - 2014 andadapted to western South Dakotawas conducted using a simulation modeling approach. The four systems examined were: continuous grazing (CONT), Mob (high intensity, short duration) grazing, 4-PR-1 (four paddocks grazed once per season), and 4-PR-2 (four paddocks grazed twice per season). Economic results and animal performance results showed 4-PR-2with the highest returns to labor and management and lowest variation in returns, followed by continuous, 4-PR-1 and Mob grazing systems. This ranking was the same for both per animal and per acre returns.
Publications
- Type:
Other
Status:
Published
Year Published:
2014
Citation:
Janssen, Larry; Kim Dillivan and Bronc McMurtry. 2014. South Dakota agricultural land market trends, 1991 - 2014. (03-7007-2014) Brookings, SD: SD Ag. Expt. Station. May. http://igrow.org/up/resources/03-7007-2014.pdf
- Type:
Conference Papers and Presentations
Status:
Published
Year Published:
2014
Citation:
Luri, Moses; Larry Janssen. 2014. An empirical analysis of risks and returns on alternative cropland lease arrangement practices in South Dakota using a Flex Rent modeling approach. Selected paper presented to annual meetings of Western Agricultural Economics Assoc. June 22 - 24.
- Type:
Conference Papers and Presentations
Status:
Published
Year Published:
2014
Citation:
Janssen, Larry; Kuo-Liang Chang, and Kopila Bhattarai. 2014. Factors determining long-term trend of cropland values and cash rental rates in South Dakota. Selected paper presented to annual meetings of Western Agricultural Economics Association, June 22 - 24.
- Type:
Conference Papers and Presentations
Status:
Published
Year Published:
2014
Citation:
McMurtry, Bronc; Larry Janssen, Michael Miller, and Shannon Osborne. 2014. Profit and risk analysis of alternative no-till and conventional tillage crop rotation systems in East Central South Dakota. Selected poster presented to annual meetings of Agricultural and Applied Economics Assoc. Minneapolis, MN. July 27 - 29.
- Type:
Other
Status:
Published
Year Published:
2014
Citation:
Janssen, Larry; Kim Dillivan, and Bronc McMurtry. 2014. South Dakota 2014 agricultural land values and cash rental rates. (Econ Comm. 548). Brookings, SD: Econ Dept. May 29.
- Type:
Theses/Dissertations
Status:
Published
Year Published:
2014
Citation:
Bhatttarai, Kopila. 2014. Analysis of cash value trends of agricultural lands in South Dakota. M.S. Thesis: Economics Dept. South Dakota State University.
- Type:
Theses/Dissertations
Status:
Published
Year Published:
2014
Citation:
Khan Chowdhury, Nazea. 2014. Estimating the economic and environmental benefits of implemented conservation practices on sediment reductions in the Lower Bad River basin of South Dakota. M.S. Thesis; Economics Department. South Dakota State University.
- Type:
Journal Articles
Status:
Awaiting Publication
Year Published:
2014
Citation:
Smart, A; D.E.Clay, R. Stover, M. Parvez, K.Reitsma, L. Janssen, and N. Troelstrop. 2014. Persistence wins: long term agricultural conservation outreach pays off. Journal of Extension (accepted for publication, Oct 2014)
|
Progress 10/01/12 to 09/30/13
Outputs
Target Audience: The target audiences for the annual land market research efforts were lenders, farmland owners and renters, land investors, legislators and other policymakers, and students in South Dakota and surrounding states. These audiences were reached through the annual land market report (paper copy and internet), Economics Commentators, SDSU news releases and radio interviews, and presentations in classrooms, at Extension workshops, appraisal conferences, and bank sponsored meetings. The target audiences for detailed econometric analysis of agricultural land market trends are agricultural economists and other professional scientists. These audiences were reached through professional paper and poster presentations.The target audiences for the conservation assessment project and conservation tillage projects were initially professional scientists, agricultural economists, and federal conservation officials interested in the topic. These audiences were reached through research reports and professional paper presentations to various organizations. Changes/Problems:
Nothing Reported
What opportunities for training and professional development has the project provided? Two graduate students completed most of their Master's thesis from research work conducted on this project and related grants.In addition each graduate student co-wrote and presented a selected paper at regional economic conferences. Two undergraduate students conducted independent studiesand conference papers / presentationsdirectly related to this project.One student per year works on most components of the annual farmland survey project. How have the results been disseminated to communities of interest? The annual research report and Economics Commentator report on farmland valuation trends are widely disseminated via I-Grow and other internet sites. Dr. Janssen and others also make presentations on farmland market issues to various local / regional conferences of appraisers, bankers, and other agri-professionals. What do you plan to do during the next reporting period to accomplish the goals? The 24th annual survey of SD farmland markets and rental rates will be conducted and results disseminated. Research efforts using the farmland market database from 1991 to present will be emphasized in terms of empirical work and resarch publications. Dr. Janssen continues working with mulitidisciplinary teams in preparing publications related to the agricultural conservation and land management objectives. In addition, a new NIFA grant starting in 2014 will lead to development of producer surveys on factors explaining land use changes in the Prairie Pothole regions of North and South Dakota.
Impacts
What was accomplished under these goals?
The project involved conducting an annual survey of agricultural land values and rental rates in South Dakota. Detailed information on land values and cash rents is annually reported for cropland, hay land, pasture, and rangeland by sub-state region from 1991 – 2013, providing a detailed 23-year history of regional trends. The most recent two years of annual increases for all agricultural land values, 33.6% from 2012 to 2013 and 26.8% from 2011 to 2012, are the highest annual rates of increase in the past 23 years. The rapid growth rate in the past two years is closely related to high commodity prices, good crop yields in most of the state, and lower mortgage interest rates, whose combined effects offset weaknesses in the national and regional economic recovery. During the past five years, cropland values increased more rapidly than rangeland values (140% vs. 80%), while cash rents increased at a slower pace (95% for cropland and +45% for rangeland). In general the rates of increase in land values and cash rental rates were strongest in the eastern, north-central and central regions of the State, which are the most crop-intensive regions of South Dakota. Current average rates of cash return on agricultural land in South Dakota were lower in 2013 than in any of the past 22 years. For 2013, gross cash rent to current land value averaged 3.3% for all farmland, 3.5% for cropland, and 3.0% for rangeland. Farm expansion and investment potential, along with strong profits and high commodity prices, were cited as the major reasons for purchasing farmland, while retirement, settling estates, and realizing gains from high sale prices were the major reasons for selling farmland. Econometric analyses of key factors affecting cropland values and rental rates from 1994- 2008 in South Dakota were conducted using county-level annual data. Results showed: (1) cropland cash rents were largely predicted from lagged (previous year) crop revenue with r2=0.76, and (2) deflated cropland value per acre was estimated from four key explanatory variables: predicted cash rent (+), corn revenue as percent of total crop revenue(+), county population density (+), and deflated farm mortgage interest rates (- ). This preliminary study will be expanded to consider additional variables and econometric approaches. Further economic assessment was conducted on the value of conservation practices adopted from 1990 – 2004 on sediment reduction in the Lower Bad River basin of SD. Sediment reduction estimates due to conservation practices (BMPs) implemented were estimated at 36 – 38%. The estimated cost of adopting the BMPs was $7.8 million (in constant 2000 $). Over a projected 15 year benefit life from 2005 – 2019, the estimated value of sediment reduction varies $19.8 million, using a $2.13 per ton value of sediment reduction. Another study summarized key economic results from 10 different no-till (NT) crop rotations and two conventional tillage (CT) corn-soybean rotations based on agronomic data (2001 – 2012) from a long-term crop rotation experiments conducted by the North Central Agricultural Research Center in eastern SD. A 1200 acre model crop farm was constructed for budget and simulation analyses. Results indicate: (1) the CT rotations had the highest average net returns, but higher risks were also involved, (2) several four-crop NT rotations were preferred as producer risk aversion increased, and (3) crop diversification is a key risk management tool. The impacts of the project include addition to the information collected and analyzed over the life time of the study for over 23 years. The information and analyses concerning agricultural land values and rental rates and the relative importance of factors affecting statewide and local land markets were disseminated to numerous decision makers. This information is widely used as part of the decision making process for adjusting cash rental rates, making land purchases or sales, and land policy related purposes. The economic assessment of conservation practices is one major component of a multi-disciplinary assessment of changes in water quality and conservation in the Bad River basin of South Dakota. The complete analysis in the USDA-NRCS CEAP project helps provide conservation professionals, farmers and ranchers, agricultural scientists, and agricultural policy makers with information concerning the longer-term value of conservation projects. The economic performance analysis of 12 different crop rotations provides key data for crop producers and agronomists in eastern SD.
Publications
- Type:
Journal Articles
Status:
Published
Year Published:
2013
Citation:
Bourlion, Nelly; Larry Janssen, and Michael Miller. 2013. Economic analysis of private and public benefits of corn, switch grass, and mixed grass systems in eastern South Dakota. Journal of Renewable Agriculture and Food Systems. July.
- Type:
Book Chapters
Status:
Published
Year Published:
2013
Citation:
Bourlion, Nelly; Larry Janssen and Donald Guthmiller. 2013. Chpt. 56: Soybean Production Costs. I-Grow Soybean Production Management book. South Dakota State University. D. Clay and G. Carlson, ed.
- Type:
Other
Status:
Published
Year Published:
2013
Citation:
Janssen, Larry; Burton Pflueger and Bronc McMurtry. 2013. South Dakota agricultural market trends, 1991 2013. (03-7007-2013) Brookings, SD: SD Ag. Expt. Station. June.
http://igrow.org/up/resources/03-7007-2013.pdf.
- Type:
Conference Papers and Presentations
Status:
Accepted
Year Published:
2013
Citation:
Bhattarai, Kopila; Larry Janssen and Kuo-Liang Chang. 2013. Analysis of cash value trends of agricultural lands in South Dakota. Selected paper presented to annual meetings of Missouri Valley Assoc. Kansas City, MO. Oct 17 19.
- Type:
Conference Papers and Presentations
Status:
Accepted
Year Published:
2013
Citation:
Chowdhury, Nazea; Larry Janssen and Michael Miller. 2013. Estimating the economic and environmental benefits of implemented conservation practices on sediment reduction in the Lower Bad River Basin of South Dakota. Selected paper presented to annual meetings of Missouri Valley Assoc. Kansas City, MO. Oct. 17 19.
- Type:
Conference Papers and Presentations
Status:
Accepted
Year Published:
2013
Citation:
McMurtry, Bronc; Larry Janssen, Michael Miller, Justin Harer, and Shannon Osborne. 2013. Crop rotations and risk preferences in Brookings County, South Dakota. Selected paper presented to annual meetings of Missouri Valley Assoc. Kansas City, MO. Oct. 17 19.
- Type:
Conference Papers and Presentations
Status:
Accepted
Year Published:
2013
Citation:
Janssen, Larry; Kuo-Liang Chang and Kopila Bhattarai. 2013. Factors determining long-term trends of agricultural land values in South Dakota. Selected poster presented to the joint annual meetings of AAEA & CAES. Washington DC. Aug. 4 6.
- Type:
Other
Status:
Published
Year Published:
2013
Citation:
Janssen, Larry; Burton Pflueger, and Bronc Mc Murtry. 2013. South Dakota agricultural land values and cash rental rates, 2013. (Econ. Comm. 545). Brookings, SD: Econ Dept. July 26.
|
|