Yield Efficiency Using a Stochastic Frontier Approach for Corn, Soybeans, and Hard Red Spring Wheat in North Dakota

Abstract

Agriculture is a keystone for the North Dakota economy. The research focused on three selected crops’ yield: corn, soybeans and HRS wheat. The research provides a direct and indirect cumulative elasticity measure for North Dakota for each of the three crops’ yields using stochastic yield frontier models. In addition, the research provides the technical efficiency frontiers for nine different regions in North Dakota as well as across the 22 years (1994 to 2015). The results revealed that each of the three crops’ yields have a stronger relationship with weather variables than input cost and quantity variables. The mean level of corn, soybeans, and HRS wheat technical efficiency were 73 percent, 80 percent, and 72 percent, respectively. This research proposes that each of the three crops’ operations could potentially improve efficiency without adding extra expense of input costs. Overall, North Dakota farmers were relatively efficient in each of the crops’ operations.