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Published February 23, 2011, 01:42 PM

Midwest crops reach record values in 2010

The total value of North Dakota’s 2010 crop production was pegged at a record $7.44 billion, up 36 percent from the previous year’s $5.48 billion, according to estimates released recently by the U.S. Department of Agriculture’s North Dakota field office.

By: Stephen J. Lee, Grand Forks (N.D.) Herald

The total value of North Dakota’s 2010 crop production was pegged at a record $7.44 billion, up 36 percent from the previous year’s $5.48 billion, according to estimates released recently by the U.S. Department of Agriculture’s North Dakota field office.

The big three crops hit a trifecta of records.

Evan Swindall of the National Agricultural Statistics Service’s office in Fargo, N.D., says the state’s most valuable crop, spring wheat, was up 31 percent to a record high value of $1.86 billion.

The soybean crop was pegged at $1.56 billion, up 45 percent from the previous high in 2009 of $1.08 billion.

And North Dakota’s corn crop also hit a record value of $1.33 billion, more than doubling the value of the 2009 crop, which was $636 million; the previous record value was $1.1 billion for the 2007 corn crop.

Minnesota’s 2010 total crop value went up a whopping 41 percent from the 2009 crop, $12.39 billion compared with $8.77 billion. That also appears to be a record for Minnesota, based on figures published by USDA. The previous high appears to be in 2008, when Minnesota’s total crop value was $9.6 billion.

Nationally, the total value of the 2010 crop production for field crops such as wheat, corn and soybeans, as well as “miscellaneous” specialty crops such as potatoes and dry edible beans, as well as cotton and peanuts, was estimated by USDA at $160 billion, 26 percent higher than 2009’s figure of $127 billion.

That appears to be a record, at least in nominal terms.

Looking back

In constant dollars, other eras saw better values. The total value of the nation’s field crops produced in 1973 — the year the Soviet Union for the first time came in big buying wheat on the world market, doubling grain prices or better — was pegged at $52 billion by USDA. That would be about $260 billion in today’s dollars, according to federal Consumer Price Index figures that account for inflation.

The total value of crop production is figured by multiplying the production of each crop times the average prices received. The figures released in February are preliminary and will be adjusted after the entire marketing year is complete. For example, there still is wheat and corn in farmers’ bins that has not been sold from last year’s crop.

Sugar beets are not included in this report because of the way the prices are adjusted during the year as the beets are processed into sugar. USDA later feeds the sugar beet value figures into the annual totals in later reports. And there is little doubt the past growing season will result in a record value for the beet crop, too, based on record average yields and record payments estimated for growers.

Good days in ag

The news from USDA caps a remarkable run for farmers in North Dakota and Minnesota in the first decade of the 21st century.

The value of North Dakota’s crops has doubled in the past four years — it was $3.69 billion in 2006 — and has more than tripled since 2000, when the total crop value was pegged at $2.38 billion by USDA.

Minnesota also has seen total crop value triple the past decade.

North Dakota Commissioner of Agriculture Doug Goehring appreciates it in a keenly personal way. He farms near Menoken, N.D., just a 25-minute drive from his office in the North Dakota capitol building and gets home to drive combine and tractor after a day in his Bismarck office.

“It’s a good day for agriculture,” Goehring says. “And we are actually working with a large part of the crop that has not even been marketed, because people are still holding out for higher prices because there is so much optimism in the market. So it will probably end up higher than that $7.4 billion estimate.”

While many parts of the United States have had bad growing years recently, North Dakota, with a few exceptions, has gotten good crops year in, year out. Meanwhile, prices have hit historic highs in not just one or two crops, but most of them.

“I had some corn yields as high as 163 bushels an acre on a 120-acre field. And that is dryland. But my overall average was 109 bushels an acre. I had soybeans that ran from 30 to 63 (bushels an acre).”

Those figures are well above long-term norms in south-central North Dakota, where raising corn for grain wasn’t considered a good deal only a few years ago.

And to show he hasn’t done everything right last year, a glitch in a rented fertilizer spreader meant most of his wheat crop didn’t get any help. But he still got an average yield of 32 bushels, which a decade ago was above normal in his region.

Yield records

North Dakota farmers have hit new highs across the board in many crops in terms of average yields, Goehring says.

“That just tells you something about the type of seed genetics we are getting, the good research and breeding programs, and the better equipment we have. The fact is we are doing a better job of managing the crop,” he says.

To top it off, last summer crop prices began rising, counter to the norm, as harvest approached, and have mostly continued to rise.

It’s not just the major crops. Canola, an oil seed grown mostly near Canada, saw its value double from 2009, with the 2010 crop estimated at a record $437 million; that’s four times what it was worth a decade ago. Dry edible beans, such as pinto beans, were estimated at $264 million in total value, up 16 percent from 2009 but below the record $298 million in 2008.

USDA says it doesn’t have sugar beet production values available yet for the 2010 crop. However, the 2009 sugar beet crop was valued at $249 million, a decrease of 4 percent from the 2008 total of $260 million.

There seems little doubt that sugar beet values also hit a record for the 2010 crop, however. American Crystal, the major processor in the Red River Valley of eastern North Dakota and northwestern Minnesota, had a record yield of 27 tons an acre and told growers it looks like their per-ton payment will be a record $57 by next fall, although that can change depending on how the processing campaign goes.

Cost of production, land

But Goehring says the other side of the coin is that production costs are increasing for farmers, too. Fertilizer and fuel prices already are up over a year ago and herbicide seem poised to increase in price, too, he said.

Meanwhile, the high-rising land prices may add to the net worth of landowners, but most farmers rent more land than they own.

“When landlords see (rising crop prices), they start asking for more money,” Goehring says.

The increased crop values help the whole state, Goehring says.

“Income taxes and sales taxes, we will see them increase,” he says, adding to the state government’s surpluses.

“We will see more money being spent on Main Street for supplies and parts and equipment. The money never stays in farmers’ pockets,” he adds.

Despite all the news of late about the hot oil patch activity in North Dakota, farmers are mining North Dakota’s main resource, Goehring says.

“The effect of agriculture on our economy is greater than any other sector,” he says.

Revenue from North Dakota’s crops turns over in the economy, multiplying the effect of every dollar 3.6 times, Goehring says.