Stochastic Budgeting and Input Breakeven Analysis in North Dakota Potato Production

• Main Author: Bingham, Alan
• Format: Others
• Published: North Dakota State University 2018
• Online Access: https://hdl.handle.net/10365/28641

Enterprise budgets were developed for non-irrigated red and irrigated russet potato production, based on North Dakota model farms. Costs and revenues vary among producers, thus budgets are intended to serve as a template for producers to use and manipulate to suit their individual circumstances. These budgets and stochastic (Monte Carlo) simulation were utilized in order to analyze and quantify financial risk in each respective enterprise. Simulated net returns for non-irrigated production ranged from -$1,324 to $2,757 per acre, while irrigated returns were between -$551 and $1,616 per acre. On farms where fumigation is a typical practice, it is one of the largest expenses to the enterprise. A break-even analysis was conducted based on market price and possible increases in yield and yield quality. The breakeven curve is downward sloping, as market price increases. Ideal product selection, based on assumed benefits, may vary depending on expected market price.