Our team tested the hypothesis that as crop price expectations increase, producers will apply more water to increase yields in order to maximize profit. In general, this study, which used annual data from Groundwater Management District #4 in northwestern Kansas from 2001-​2017, found that crop price expectations have no significant impact on the quantity of groundwater pumped per acre on alfalfa, corn, grain sorghum, soybeans, and wheat. This suggests that groundwater pumping decisions are not consistent with the anticipated profit maximization framework expectations and that irrigated producers consider groundwater as a fixed input. This could possibly be due in part to the limited availability of groundwater in the area. Results also suggest that producers of irrigated corn, alfalfa, and wheat in northwest Kansas do vary the quantity of groundwater pumped as rainfall varies. However, only a small amount of precipitation falls during the year at a time that will affect crop production and pumping. The quantity of groundwater pumped for soybean and sorghum production does not appear to be sensitive to changes in rainfall.

Publication: Sukcharoen, K., B. Golden, M. Vestal, and B. Guerrero (2020). Do crop price expectations matter? An analysis of groundwater pumping decisions in Western Kansas. Agricultural Water Management Volume 23131 March 2020, 106021.

This article is part of a special issue titled “Managing the Ogallala” published by Agricultural Water Management that was guest edited by Ogallala Water team members Ryan Bailey, Meagan Schipanski, and Isaya Kisekka.

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