ECONOMICS OF AGRICULTURAL LAND USE CHANGE AND ASSOCIATED ECOLOGICAL AND ENVIRONMENTAL IMPACTS IN NORTH DAKOTA

• Sponsoring Institution: National Institute of Food and Agriculture
• Project Status: COMPLETE
• Funding Source: HATCH
• Reporting Frequency: Annual
• Accession No.: 1001936
• Project Start Date: Nov 15, 2013
• Project End Date: Sep 30, 2018
• Program Code: [(N/A)]- (N/A)

Recipient Organization
NORTH DAKOTA STATE UNIV
1310 BOLLEY DR
FARGO,ND 58105-5750

Performing Department
Agribusiness and Applied Economics

Non Technical Summary
Since 1937, North Dakota has consistently been among the top five wheat producing states by volume. However, the total area of wheat in the state has been decreasing steadily since 1990, as wheat cultivation is replaced by corn and soybeans. This large-scale change over the last 23 years has been beneficial to North Dakota's agricultural producers. For example, the introduction of several short-season corn and soybean varieties during this time frame has allowed producers to select from a wider variety of crops that can be produced profitably in North Dakota growing conditions. Increasing export demand for soybeans for foreign livestock operations has also increased soybean prices, making soybean production more profitable than before throughout the world. Federal subsidies for ethanol and biodiesel have also encouraged adoption of corn-soybean crop rotations by further increasing demand for these two crops as industrial input in the biofuels industry. Overall, these economic drivers of land use change are beneficial to farmers. However, land use change and public policy that promotes land use change may have unintended consequences for the environment. For example, different crops leave soil more or less exposed, potentially affecting soil erosion and water pollution levels. Productive agricultural lands also provide habitat for certain species. For example, winter wheat planted into stubble from the previous crop mimics the tall grass habitat preferred by early-nesting duck species. Spring wheat is also suitable nesting habitat for late-nesting duck species. These types of habitat are also preferred by pheasants. Thus, change in crop selection in North Dakota may affect the prevalence of certain economically valuable game animals. This project is an effort to model the economics of land use change in North Dakota and to explore the links between the agricultural economy and the environment in the state. It is anticipated that the resulting research will be useful to agricultural policy makers at the state and national levels, and may help private conservation organizations in targeting their conservation efforts.

Animal Health Component

30%

Research Effort Categories

Basic

70%

Applied

30%

Developmental

(N/A)

Classification

Knowledge Area (KA)	Subject of Investigation (SOI)	Field of Science (FOS)	Percent
605	0199	3010	100%

Knowledge Area
605 - Natural Resource and Environmental Economics;

Subject Of Investigation
0199 - Soil and land, general;

Field Of Science
3010 - Economics;

Keywords

land use change

wildlife habitat

duck nesting

northern great plains

winter wheat

Goals / Objectives
Analyze recent trends in agricultural land use change in North Dakota: Create statistical models to discover the impacts of market incentives, public policy, spatial effects, and climate patterns on historical, current, and future changes in agricultural land use; Determine financial and demographic variables that influence a producer's decision to adopt different tillage, nutrient management, crop rotations, and other practices; and Quantify how NDSU's hard red winter wheat (HRWW) improvement efforts may impact producer profitability and land use change. Analyze the impacts of land use change on North Dakota Ecology and the Environment: Model environmental impacts of land use change on water quality, soil quality, and greenhouse gas emissions; Assess the ecological impacts of land use change on wildlife habitat, especially the effects on migratory waterfowl nesting habitat; and Use economic analysis to determine how NDSU's HRWW improvement efforts and producer adoption of BMPs may impact ecological and environmental quality.

Project Methods
Analyze recent trends in agricultural land use change in North Dakota: Create statistical models to discover the impacts of market incentives, public policy, spatial effects, and climate patterns on historical, current, and future changes in agricultural land use: A spatial econometric model will be developed and updated to determine how cropping patterns have changed (e.g. declining wheat acreage, increasing acreage of corn and soy) over the most recent decade, and which economic and climatic variables have been driving these changes. Variables that will be investigated include U.S. energy policy changes, introduction of transgenic crop varieties, export demand for various crops, crop prices, weather, etc. Estimation will be based on the Crop Data Layer from the US Department of Agriculture's National Agricultural Statistics Service. This model will be used to predict future changes in cropping patterns associated with various energy policy proposals and potential market conditions of the future. Determine financial and demographic variables that influence a producer's decision to adopt different tillage, nutrient management, crop rotations, and other practices: Survey methods will be used to determine the economic tradeoffs between average profitability, financial risk, and environmental protection producers consider when determining whether to adopt specific practices. Survey results will be analyzed using appropriate limited dependent variable estimation techniques. Quantify how NDSU's hard red winter wheat (HRWW) improvement efforts may impact producer profitability and land use change: Taking into consideration the goals of NDSU's HRWW improvement program for increasing disease resistance, protein content, and cold tolerance, a methodology will be developed to predict the future profitability of HRWW under North Dakota growing conditions. The spatial econometric model will then be used, in conjunction with results from the survey, to predict how specific improvements to HRWW would affect agricultural land use change and cropping patterns. Dr. Francois Marais will provide information about NDSU's HRWW breeding efforts and the feasibility and time frame for developing HRWW varieties with adaptive attributes for North Dakota Growing conditions. This information will be used to model the adoption farmers' adoption of HRWW in the future. Analyze the impacts of land use change on North Dakota Ecology and the Environment: Model environmental impacts of land use change on water quality, soil quality, and greenhouse gas emissions: Watershed-scale hydrologic modeling will be used to determine how these changes in cropping patterns affect water quality. Dr. Zhulu Lin will provide advice and assistance with hydrologic modeling using appropriate software (e.g. SWAT Model, EPIC Model, etc.). Land use change will be modeled using spatial econometrics. Inputs for the hydrologic models will include geospatial data on soil types, hill slope, climate, and historical and projected cropping patterns (among others). The outputs from this modeling effort can be used to determine the effects of agricultural prices and profitability on environmental variables via the land use change pathway. Assess the ecological impacts of land use change on wildlife habitat, especially the effects on migratory waterfowl nesting habitat: Predicted changes in crop coverage will be used to determine the impacts of agricultural land use change on wildlife habitat, especially duck nesting success on cropland. This analysis will show the economic and environmental tradeoffs society makes in pursuing its goals to produce abundant food and fuel along with a clean environment and stable ecosystems. A meta-analysis of studies relating waterfowl nesting behavior and other ecological factors will be used to approximate the parameters of the relationships between land use and ecology in North Dakota. Use economic analysis to determine how NDSU's HRWW improvement efforts and producer adoption of BMPs may impact ecological and environmental quality: Economics-based predictions of land use change resulting from winter wheat breeding efforts will be used to determine how HRWW improvements might affect the environment and ecology as the crop gains wider adoption in North Dakota. This portion of the project will particularly analyze how not only the costs of HRWW breeding efforts but also the resulting enhanced producer profits relate to subsequent ecological and environmental changes in GHG balance and wildlife habitat. This objective is simply an extension of objective 2(b). That will compare simulated future adoption of improved HRWW cultivars with simulated adoption of currently available HRWW cultivars (a baseline) during the same simulation time frame. Simulated adoption levels will be the outputs of spatial-econometric modeling. Simulated ecological and environmental conditions will be compared between scenarios with and without improved HRWW varieties.

Progress 11/15/13 to 09/30/18

Outputs
Target Audience:The target audiences for the research results from this project over the past five years have included NDSU students, scholars at academic institutions throughout the U.S., state and federal legislators, and state and federal agency administrators, among others. Graduate students gained research training in Agribusiness & Applied Economics (2 MS students), Environmental & Conservation Science (1 MS student, 1 PhD student), and Natural Resource Management (1 MS student, 1 PhD student). These students were trained in research methodology, including data acquisition, data management and maintenance, and econometric/statistical methods required to model and analyze issues in agricultural and natural resource management. Research topics included models of duck nesting on agricultural land, evolving agricultural crop selection patterns, conservation program design, and flood risk on agricultural land. Graduate students also wrote theses and/or dissertations as part of their training process. NDSU undergraduate students (primarily from Agribusiness, Agricultural Economics, and Natural Resource Management degree programs) also participated in the project by helping identify, acquire, and organize time-series and spatial data. These students had to learn about the research questions to be able to identify appropriate datasets and organize them for efficient use to be added to graduate student's databases. Results have been shared in various formats--through selected paper and poster presentations at various conferences, peer-reviewed academic journal articles, published theses and dissertations, and online writings in the popular press. Thereby, scholarly colleagues working in research, education, and cooperative extension were exposed to the methodologies and results. During several conferences my students and I took advantage of the opportunity to share information and results with North Dakota's state and federal legislators who were in attendance, as well as program administrators from various federal and state agencies (e.g. National Science Foundation; U.S. Department of Agriculture; North Dakota Department of Commerce). Publications for popular press release via the Department's Spotlight on Economics column also reached a broader audience and spurred interest from (and discussions with) reporters for various related periodicals and other interested parties, as intended. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?This project supported me and several graduate students to attend national and regional conferences to present research research results. The project has also supported me in training graduate students to understand and apply rigorous statistical analysis methods in econometrics, and to be able to make inferences about the real world based on applied econometric analyses. How have the results been disseminated to communities of interest?My graduate students and I have attended several academic conferences to present results stemming from this project. In addition, we have had opportunities to present results to policy makers, including state and federal level legislators and others, through our participation in the Annual State Conferences of North Dakota Established Program to Promote Competitive Research. I have also written about this project's results for my department's Spotlight on Economics series published online by NDSU, which have been republished by other online local news outlets. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? Analyze recent trends in agricultural land use change in North Dakota: Create statistical models to discover the impacts of market incentives, public policy, spatial effects, and climate patterns on historical, current, and future changes in agricultural land use. An acreage-response model has been developed and estimated with the assistance of two Graduate Research Assistants (Nazea Khan Chowdhury and Jinat Rehana). The statistical model applied to this research question is called the Seemingly Unrelated Tobit Regressions model. The state of North Dakota was divided into 1,355 gridded squares of 50 square miles apiece. The acreages of each of five crops--barley, corn, "oilseeds," soybean, and wheat--were recorded at each of these locations each year from 1997 to to 2017. These acreages were used as dependent variables in five different (but related) regressions. Some explanatory variables used in this research included expected crop prices (lagged spot prices for barley and "oilseeds", and futures contract prices for corn, soybean, and wheat), prices of deisel and ammonium nitrate, and climate variables (20-year monthly averages of daily high temperature, daily low temperature, total precipitation). The regression equations were estimated jointly because doing so improves the asymptotic efficiency of the estimators relative to estimating them individually. Own- and cross-price elasticities were calculated to assess relationships between pairs of crops. We found that major contributing factors influencing aggregate planting decisions for each crop include (1) the crop's own price and yield, (2) the prices and yields of other crops, (3) agricultural input prices, (4) climate variables, (5) soil textures, and (6) the federal Renewable Fuels Mandate. For the most part, estimated elasticities comport with economic theory--e.g. if the expected crop price is high, farmers respond by planting more of that crop. The cross-price elasticities reveal the general substitutability of pairs of crops, and how the substitutability of two crops varies over space based on site-specific factors. For example, wheat-soy rotations and barley-soy rotations have been replaced in the southeastern portion of the state by corn-soy rotations, illustrating a high substitutability between wheat and corn in some cropping systems. Nazea's dissertation based on this work will be submitted to the graduate school at NDSU by 1 February 2019. A detailed departmental research report will then be prepared for online publication, and a journal article manuscript will be submitted for publication. Analyze recent trends in agricultural land use change in North Dakota: Determine financial and demographic variables that influence a producer's decision to adopt different tillage, nutrient management, crop rotations, and other practices. Collaborations with colleagues and their graduate students have been the primary means of addressing this goal. I helped by designing discrete choice experiments to estimate the impacts of contract attributes (rental rates, government cost share levels, flexibility of rental rates and grazing permits, burning permits, etc.) on farmers' willingness to accept a contract from two conservation programs--the Conservation Reserve Program and the Working Wetlands Program. These efforts have led to several presentations and publications. Analyze recent trends in agricultural land use change in North Dakota: Quantify how NDSU's hard red winter wheat (HRWW) improvement efforts may impact producer profitability and land use change. Nothing to report. Analyze the impacts of land use change on North Dakota Ecology and the Environment: Model environmental impacts of land use change on water quality, soil quality, and greenhouse gas emissions. These topics were addressed in my work with Daniel Margarit, a PhD student from Natural Resource Management. Manuscripts have been submitted to various journals, and are currently under revision to be submitted to different journals. Analyze the impacts of land use change on North Dakota Ecology and the Environment: Assess the ecological impacts of land use change on wildlife habitat, especially the effects on migratory waterfowl nesting habitat. Nothing to report. Analyze the impacts of land use change on North Dakota Ecology and the Environment: Use economic analysis to determine how NDSU's HRWW improvement efforts and producer adoption of BMPs may impact ecological and environmental quality. Nothing to report.

Publications

• Type: Theses/Dissertations Status: Published Year Published: 2015 Citation: Soares, A. B. (2015). Crop price and land use change: Forecasting response of major crops acreage to price and economic variables in north dakota (Order No. 1592730). Available from Dissertations & Theses @ North Dakota State University. (1708672567). Retrieved from https://ezproxy.lib.ndsu.nodak.edu/login?url=https://search-proquest-com.ezproxy.lib.ndsu.nodak.edu/docview/1708672567?accountid=6766
• Type: Theses/Dissertations Status: Published Year Published: 2015 Citation: Margarit, D. K. (2015). Exploring land conservation using economic and geospatial models (Order No. 3746761). Available from Dissertations & Theses @ North Dakota State University. (1757513027). Retrieved from https://ezproxy.lib.ndsu.nodak.edu/login?url=https://search-proquest-com.ezproxy.lib.ndsu.nodak.edu/docview/1757513027?accountid=6766
• Type: Theses/Dissertations Status: Published Year Published: 2017 Citation: Badarch, B. (2017). Yield efficiency using a stochastic frontier approach for corn, soybeans, and hard red spring wheat in north dakota (Order No. 10262237). Available from Dissertations & Theses @ North Dakota State University. (1904505269). Retrieved from https://ezproxy.lib.ndsu.nodak.edu/login?url=https://search-proquest-com.ezproxy.lib.ndsu.nodak.edu/docview/1904505269?accountid=6766
• Type: Journal Articles Status: Published Year Published: 2018 Citation: Wachenheim, C. D. Roberts, N. Dhingra, and W. Lesch. 2018. "Conservation Reserve Program enrollment decisions in the Prairie Pothole Region." Journal of Soil and Water Conservation 73(3):337-352. doi:10.2489/jswc.73.3.337.
• Type: Journal Articles Status: Published Year Published: 2018 Citation: Wachenheim, C.J., D.C. Roberts, N.S. Addo, J. Devney. 2018. "Farmer Preferences for a Working Wetlands Program." 38(5):1005-1015. doi:10.1007/s13157-018-1052-3
• Type: Conference Papers and Presentations Status: Published Year Published: 2015 Citation: Khan Chowdhury, N.H., D.C. Roberts, T. DeSutter, D.E. Clay. "Developing Decision Criteria for Soil Salinity Management Options on Cropland: A Case Study in Southeast North Dakota." Poster presented at 2015 Joint Annual Meeting of the Agricultural & Applied Economics Association and the Western Agricultural Economics Association. San Francisco, CA July 26-28, 2015.
• Type: Other Status: Published Year Published: 2017 Citation: Addo, N.S., C.J. Wachenheim, D.C. Roberts, J. Devney, W.C. Lesch. 2017. "Farmer Preferences for a Working Wetlands Program." North Dakota State University Agribusiness & Applied Economics Report 759. https://ageconsearch.umn.edu/record/256035/files/AAE759.pdf
• Type: Conference Papers and Presentations Status: Published Year Published: 2015 Citation: Dhingra, N., C.J. Wachenheim, D. Roberts, W.C. Lesch. 2015. "Importance of Contract Attributes on Conservation Reserve Program Enrollment Decisions in the Prairie Pothole Region." Selected Paper presented at the 2015 Joint Agricultural & Applied Economics Association and Western Agricultural Economics Association Annual Meeting, San Francisco, CA, July 26-28.
• Type: Conference Papers and Presentations Status: Other Year Published: 2017 Citation: Ripplinger, D., D. Roberts. 2017. "Measuring US Maize Yield Potential, Input Efficiency, and Stress Tolerance." Selected Paper presented at 2017 Annual Meetings of the Western Agricultural Economics Association, Lake Tahoe, NV, July 9-11, 2017.
• Type: Conference Papers and Presentations Status: Published Year Published: 2016 Citation: Rehana, J., D.C. Roberts. 2016. "Agricultural Land Use Change in North Dakota: Forecasting the Response of Major Crops Acreages to Weather and Market Variables Using Spatial Simultaneous Equations Approach." Selected Paper presented at Missouri Valley Economic Association Annual Meeting. St. Louis, MO, October 27-29, 2017.
• Type: Conference Papers and Presentations Status: Published Year Published: 2016 Citation: Rehana, J., D.C. Roberts. 2016. "Land Use Changes in North Dakota: Response of Major Crops Acreages to Market and Weather Variables." Selected Poster presented at the 2016 North Dakota Established Program to Stimulate Competitive Research State Conference. Bismarck, ND, April 19, 2016.
• Type: Conference Papers and Presentations Status: Published Year Published: 2017 Citation: Badarch, B., D.C. Roberts, F. Olson, and J.E. Norland. 2017. "Yield Efficiency Using a Stochastic Frontier Approach for Corn, Soybean, and Wheat in North Dakota." Selected Poster presented at the 2017 North Dakota Established Program to Stimulate Competitive Research State Conference. Fargo, ND, April 12, 2017.
• Type: Conference Papers and Presentations Status: Other Year Published: 2016 Citation: Khan Chowdhury, N.H., D.C. Roberts. 2016. "North Dakota Agricultural Land Conversion: A Spatial Simultaneous Equations Approach." Selected Paper presented at North American Meetings of the Regional Science Association International (RSAI) 63rd Annual Meeting. Minneapolis, MN November 9-12, 2016.
• Type: Conference Papers and Presentations Status: Other Year Published: 2017 Citation: Parvez, R., D.C. Roberts. "Crop Management Activities and Greenhouse Gas Emission: A Case Study of Prairie Pothole Region." Selected Paper presented at Missouri Valley Economic Association Annual Meeting. Kansas City, MO October 26-28, 2017.
• Type: Conference Papers and Presentations Status: Other Year Published: 2016 Citation: Parvez, R., D.C. Roberts, D. Ripplinger. 2016. "Economic Activity and Biofuel-Energy Policy Impact on Land Use Conversion of North Dakota." Selected Paper presented at North American Meetings of the Regional Science Association International (RSAI) 63rd Annual Meeting. Minneapolis, MN November 9-12, 2016.
• Type: Other Status: Published Year Published: 2016 Citation: Roberts, D. Exploring Flooding Effects on Devils Lake Conservation Land Supply: Impacts for agricultural landowners include productivity losses caused by permanent inundation or temporary flooding. Spotlight on Economics, September 2016. https://www.ag.ndsu.edu/news/columns/spotlight-on-economics/spotlight-on-economics-exploring-flooding-effects-on-devils-lake-conservation-land-supply/

Progress 10/01/16 to 09/30/17

Outputs
Target Audience:Three graduate students working under my guidance were part of the target audience. They recieved training in research methodology and also made presentations at professional meetings. Other researchers were also part of the target audience via presentations at professional meetings and submission of manuscripts to various journals. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Graduate students were trained in research methodology and data management. How have the results been disseminated to communities of interest?Bayarbat and I presented a poster at the 2017 North Dakota EPSCoR State Conference based on his thesis work. Dr. David Ripplinger joined me to work present a paper about corn yield efficiency and climate at the 2017 West Agricultural Economics Association. What do you plan to do during the next reporting period to accomplish the goals?I will do the following: See Nazea Khan Chowdhury's training as a doctoral student through to completion, including advising her as she completes her dissertation. Produce and submit at least one co-authored journal article manuscript, possibly two, based on her dissertation. Produce a co-authored journal article manuscript based on Bayarbat Badarch's MS thesis. Co-author a large grant proposal on wildlife responses to climate change. I am also likely to submit 2 additional related journal article manuscripts and a departmental report.

Impacts
What was accomplished under these goals? Create statistical models to discover the impacts of market incentives, public policy, spatial effects, and climate patterns on historical, current, and future changes in agricultural land use Nazea Hasan Khan Chowdhury, a doctoral student in Environmental Conservation Sciences, has gathered and processed large amounts of data and estimated a crop acreage response models. The dataset we produced breaks North Dakota into about 1,300 cross-sectional units, each with an area of 50 mi2. The proportion of each cross-sectional unit covered by each crop is tracked from 1997 to 2016 using the National Agricultural Statistics Service's Cropland Data Layers. Each cross-section's location-specific factors are also in the dataset, including soil types, and climate normals gathered from the SSURGO database and from the PRISM databse. Along with futures price, these data have been used to fit six acreage response functions estimated using a seemingly-unrelated Tobit regression. Own- and cross-price elasticities have been calculated based on the parameter estimates. Nazea is currently completing her dissertation based on these results. Bayarbat Badarch, a doctoral student in Natural Resource Management, completed his thesis in May 2017. He used a stochastic frontier approach to estimate yield frontiers (maximum yield potential) for corn, soybean, and hard red spring wheat in the various budgeting regions of North Dakota using farm-level data from each budget region from 1990 to 2016. The results were very interesting in that yield increases in corn and wheat appear to have two main drivers: (1) improved input use-efficiency over time and (2) increased maximum yield potential, probably related to improved corn varieties. Increases in soybean yield, on the other hand, appear to be primarily driven by improved input use-efficiency, while the frontier yields for soybean have not increased (alpha > 0.1). I am also collaborating with Dr. Cindy Juntunen on a multi-year survey about farmer attitudes toward conservation practices, including tillage, cover crops, grassed waterways, shelterbelts, et cetera.

Publications

• Type: Journal Articles Status: Awaiting Publication Year Published: 2018 Citation: Wachenheim, C. D. Roberts, N. Dhingra, and W. Lesch. Conservation Reserve Program enrollment decisions in the Prairie Pothole Region. Journal of Soil and Water Conservation. Accepted August 2017.
• Type: Other Status: Published Year Published: 2017 Citation: Addo, N.S., C.J. Wachenheim, D.C. Roberts, J. Devney, & W.C. Lesch. 2017. Farmer Preferences for a Working Wetlands Program. http://ageconsearch.tind.io/record/256035/files/AAE759.pdf
• Type: Conference Papers and Presentations Status: Other Year Published: 2017 Citation: Ripplinger, D., and D. Roberts. Measuring US Maize Yield Potential, Input Efficiency, and Stress Tolerance. Presentation Delivered at 2017 Annual Meetings of the Western Agricultural Economics Association. July 11, 2017.
• Type: Conference Papers and Presentations Status: Other Year Published: 2017 Citation: Badarch, B., D. Roberts, F. Olson, and J. Norland. Yield Efficiency Using A Stochastic Frontier Approach for Corn, Soybeans, and Wheat in North Dakota. Poster Presentation at 2017 ND EPSCoR State Conference. Presented April 12, 2017.
• Type: Theses/Dissertations Status: Published Year Published: 2017 Citation: Badarch, B. 2017. Yield Efficiency Using A Stochastic Frontier Approach for Corn, Soybeans, and Wheat in North Dakota.

Progress 10/01/15 to 09/30/16

Outputs
Target Audience:Researchers in the field andregional constituents Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Currently, I am funding and conducting work for this project for 2 MS students and 2 doctoral students, who are getting extensive training in econometrics and statistical analysis. How have the results been disseminated to communities of interest?My graduate students have presented our research results at regional professional association meetings and at the NDEPSCoR State Conference. What do you plan to do during the next reporting period to accomplish the goals?Finish the current crop of students and submit at least three manuscripts acknowledging this project.

Impacts
What was accomplished under these goals? Analyze recent trends in agricultural land use change in North Dakota: Create statistical models to discover the impacts of market incentives, public policy, spatial effects, and climate patterns on historical, current, and future changes in agricultural land use; Under my guidance, Bayarbat Badarch completed a thesis modeling productive efficiency in corn, wheat, and soybeans in the different ag reporting districts of North Dakota. Our findings indicate that both yield and yield potential (frontier yield) have increased for corn and wheat crops throughout the state since 1994. These increases in the average and the frontier yields for corn and wheat amount to an average increase of about 1 bushel per acre per year. Because the frontier yields have been increasing at approximately the same rate as the actual yields (though the actual yields are lower) the average input expenditure efficiency for these crops has not improve. On the other hand, the frontier yield for soybeans in North Dakota has not appreciably increased since 1994, though farmers have been closing the input expenditure efficiency gap over the same period. Under my constant, watchful guidance, Nazea Khan Chowdhury (doctoral student) is completing a thesis modeling land use change with seemingly unrelated tobit regression. Explanatory variables include climatological factors and market factors. She is modeling land use change within North Dakota and throughout the surounding five states at very fine and very coarse spatial resolution. Another student is using similar methodology Determine financial and demographic variables that influence a producer's decision to adopt different tillage, nutrient management, crop rotations, and other practices; and Nothing to report. Quantify how NDSU's hard red winter wheat (HRWW) improvement efforts may impact producer profitability and land use change. Nothing to report. Analyze the impacts of land use change on North Dakota Ecology and the Environment: Model environmental impacts of land use change on water quality, soil quality, and greenhouse gas emissions; Currently working on several project related to this topic area with hydrologists and climatologists at both UND and NDSU. We have a large collaborative grant together from ND EPSCoR and NSF to conduct this research. Assess the ecological impacts of land use change on wildlife habitat, especially the effects on migratory waterfowl nesting habitat; and Nothing to report. Use economic analysis to determine how NDSU's HRWW improvement efforts and producer adoption of BMPs may impact ecological and environmental quality. Nothing to report.

Publications

Progress 10/01/14 to 09/30/15

Outputs
Target Audience:Threegraduate students--Nazea Khan Chowdhury (Doctoral, Environmental Conservation Sciences)and Daniel Margarit (Doctoral, Natural Resource Management), and Abilio Barros Soares (Master of Science, Natural Resource Management)--received formal research training and informal experiential learning related to this project. Results were shared with researchers at NDSU, and also at national professional association meetings (Agricultural and Applied Economics Association). Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Two graduate students have completed their degrees during this reporting period, having recieving training in econometrics and research writing through courses selected in consultation with Dr. Roberts, as well ast through one-to-one training in econometric and statistical methods not covered in course work. How have the results been disseminated to communities of interest?One manuscript is in submission at an academic journal (Applied Economic Perspectives and Policy). A selected paper and a selected poster were both presented at the 2015 Annual Agricultural and Applied Economics Association Meetings. What do you plan to do during the next reporting period to accomplish the goals?Submit at least three manuscripts: one on sedimentation, one on statewide crop acreage response modeling, and one on grassland-to-cropland conversion. Present at least one selected paper or poster at the 2016 Annual Agricultural and Applied Economics Association Meetings on crop acreage response modeling, either at the statewide level or based on panel data with 17 years of data for very small subsections of the state to account for spatial heterogeneity in crop acreage allocation response. Develop a fine spatial scale databasewith observational units of 50 mi2 or smaller covering the years 1997 to 2014 (and potentially 2015).

Impacts
What was accomplished under these goals? Agricultural land use in North Dakota has been changing rapidly since the early 1990s. The two most marked trends are 1) the replacement of small grains-based cropping systems to corn-soy cropping systems, and 2) grassland-to-cropland conversion. The change in cropping systems will have impacts on regional hydrology and erosion from water and wind, which may lead to soil depletion and increased river and reservoir sedimentation over time. These changes are partly driven byenergy and agricultural policy shifts that affectfarmers' financial and economic incentives. For example,the Renewable Fuel Standard has icnreased demand for corn as an ethanol feedstock, and the 2014 US Farm Bill reduced the acreage cap for the Conservation Reserve Program from 32 million acres to only 24 million. Trade agrrements and increasing export demand for soybeans and corn also have impacts on US commodity markets and, therefore,crop selection in North Dakota.While manyNorth Dakota farmers willprobably benefit from the relatively new interconnectedness of agricultural commodity andfuel markets,there may be unintended impacts on wildlife habitat,as well as water and air quality. Policy makers at the state level ought to be aware ofany adverseimpacts, and the economic drivers behind them, so they can create policy solutions. Master of Science and Doctoral students in the Natural Resource Management and Environmental Conservation Sciences Programs have been gathering geospatial data from public sources, including the Cropland Data Layer, climate data, commodity market data, and processing these data for use in modeling. Statewide modeling of crop acreage response models have been estimated and we propose to share results via a presentation at professional meetings, a departmental report, and a publication in a quality, peer-reviewed journal. Our results indicate that, while changes in expected (relative) commodity prices affect acreage allocation decisions strongly, input costs are also very powerful predictors of crop acreage allocation within North Dakota, and that input prices affect the various crops in different ways because some crops are more responsive to inputs (e.g. nitrogen fertilizer) than others. Progress toward the major goals of the project: Analyze recent trends in agricultural land use change in North Dakota: Create statistical models to discover the impacts of market incentives, public policy, spatial effects, and climate patterns on historical, current, and future changes in agricultural land use; A state-level dataset was produced, and time-series analysis of market trends were used toestimate seemingly unrelatedprincipal components regressions, whichwere used to explain historical behavior of crop acreages for wheat, corn, soybeans, barley, and oats in North Dakota based on commodity prices and input costs. The modeling effort is discussed in Abilio Soares' thesis. A manuscript is being prepared for for submission to a high qualitypeer reviewed journal. A substate-level dataset is being prepared for analysis of acreage response at a spatial scale of 50 square miles. Climate and weather data, along with soil type and texture variables will also be incorporated into this dataset so regional variations in soil quality and weather can be accounted for. Estimated crop acreage response models from this data will apply spatial and time-series econometric methods. Determine financial and demographic variables that influence a producer's decision to adopt different tillage, nutrient management, crop rotations, and other practices; and I am assiting a fellow resercher at UND in the development of a survey to assess these variables. Quantify how NDSU's hard red winter wheat (HRWW) improvement efforts may impact producer profitability and land use change. Nothing to report. Analyze the impacts of land use change on North Dakota Ecology and the Environment: Model environmental impacts of land use change on water quality, soil quality, and greenhouse gas emissions; Daniel Margarit and I have produced a draft manuscript that describing an applied SWAT model and economic analysis to model potential impacts of grassland-to-cropland conversion on sedimentation. We also estimate the value of economic damages from increased sedimentation. Assess the ecological impacts of land use change on wildlife habitat, especially the effects on migratory waterfowl nesting habitat; and Nothing to report. Use economic analysis to determine how NDSU's HRWW improvement efforts and producer adoption of BMPs may impact ecological and environmental quality. Nothing to report.

Publications

Progress 11/15/13 to 09/30/14

Outputs
Target Audience: A Master of Science Student in Environmental Conservation Science at NDSU, Researchers and educators at NDSU Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Thomas Zimmermann completed his thesis and graduated with a Master of Science degree in Environmental Conservation Science. His thesis research consisted of two papers--one on modeling crop choice at the field level, and one on duck nesting habitat provision in agro-ecosystems. Thomas learned and applied econometric methods and statistical tests from coursework and in the process of his research. How have the results been disseminated to communities of interest? Results were disseminated to faculty during a thesis defense in May 2014. We are currently preparing departmental reports and manuscripts for submission to scholarly journals. What do you plan to do during the next reporting period to accomplish the goals? Continue to improve land use change modeling techniques, both at the regional scale and at the field level. Investigate farmers' willingness to accept payments to enroll in a wetland protection program using a survey instrument.

Impacts
What was accomplished under these goals? Analyze recent trends in agricultural land use change in North Dakota,objectives 1 and 2: Roberts and Zimmermann (MS Student)developed conditional logit models toestimate the relationship between cropselection, economic variables, soil type, and climate variablesusingCass County, North Dakota, as a case study. The National Agricultural Statistics Service Cropland Data Layer was used to identify the crop selection for each parcel (Common Land Unit) within Cass County from 1997 to 2012. Climate/weather data were acquired from the North Dakota Agricultural Weather Network. Price and yield data were obtained from the National Agricultural Statistics Service Quick Stats Database. Results revealed that the primary factor influencing crop selection at the field level in Cass County is the crop planted during the previous growing season. That is, farmers' crop choices are limited to the set of crops that are compatible with previous selection. Crop revenues also jointly exert a strong influence on crop selection. However, crop prices also exhibit a high degree of multicollinearity, even after adjusting for inflation. A manuscript has been drafted and is undergoing major editing in preparation for submission to an academic journal. Analyze the impacts of land use change on North Dakota Ecology and the Environment, objective 2: Roberts and Zimmermann also categorized crop rotations throughout the state of North Dakota according to their profitability and suitability as duck nesting habitat. Crop rotations that include fall seeded crops (especially small grains) are most conducive to duck nesting on agricultural land. Farmers primarily select crops based on their compatibility with current rotations and equipment. Over time, it is apparent that agricultural land in North Dakota is moving toward increased spring seeded row crop production (mostly corn and soybeans) which are inferior to fall seeded small grains as habitat for migratory birds and waterfowl. Results show that replacing a spring seeded crop (e.g. corn) with a fall seeded crop (e.g. hard red winter wheat, HRWW) one year out of four could increase duck production by up to 0.12 ducks/ac/year. Thus, switching 8 acres from a corn-soy rotation to a corn-soy-HRWW-soy rotation would be expected to produce one surviving duck that would otherwise not exist. However, converting to this rotation reduces a farmer's expected profit. The magnitude of this decrease depends upon the region within the state. Decreasing Conservation Reserve Program acreage and decreasing acreage of small grains in recent years are likely to lead to reduced duck nesting success. Breeding efforts to increase productivity and reduce yield risk in HRWW for North Dakota farmers will likely also help maintain duck nesting habitats over time.

Publications