Cost of soybean rust
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If soybean rust arrives in the
Midwest, it could cost Illinois growers from $58 million to more
than $102 million per year in combined spraying costs and yield
losses, according to a new study by Peter Goldsmith, assistant
professor in the Department of Agricultural and Consumer Economics
at the University of Illinois.
"The model uses three different
scenarios based on the severity of the outbreak and the number of
spraying applications," said Goldsmith, who also serves as the
Fellow in Agricultural Strategy at the National Soybean Research
Laboratory. "It is clear that rust will have a significant economic
impact no matter which scenario is used."
The first scenario assumes that one
spray application would be used on 25 percent of the soybean acreage
in the state at a cost of about $15 per acre. This is based on a
relatively mild infestation in which there would be about a 5
percent yield loss if no spraying occurred.
"By spraying, the overall yield loss
would be reduced to just over 3 percent or about $18 million,"
Goldsmith said. "The total cost of spraying would come to about $40
million or about $58 million for the two costs added together. At
the same time, it would avert a crop loss of $92 million, which
provides a net gain of $34 million compared to not spraying at all."
Despite the cost, spraying the crop
once pays huge dividends for growers compared to taking no action at
all. Goldsmith notes, however, that the numbers change considerably
if two spray applications are used.
"In that case, the cost of spraying
increases to more than $79 million," he said. "Crop losses fall to
about $4.6 million. Just as in the previous scenario, it would avert
a crop loss of $92 million. Although almost all the crop is saved,
the spraying costs are so high that the net gain is only about $8.4
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The last scenario is based on a
severe outbreak of rust in which a 25 percent loss would occur if
the soybeans were not sprayed. Goldsmith notes that, even by
spraying twice, the severity of the disease will push the crop loss
up to about $23 million.
"The total cost, which includes both
the spraying costs and crop loss, would come to more than $102
million," Goldsmith said. "Even so, not spraying would result in a
total crop loss of about $460 million. Despite the cost, this
translates into a net gain of nearly $358 million or $33.92 per acre
compared to taking no action at all."
Goldsmith points out that his
analysis is based on there being ample supplies and an orderly
market for the needed fungicides.
"This may not be the case if we are
not prepared," he said. "In a severe outbreak, prices could quickly
become volatile and product selection less than optimal. It is
especially critical for
manufacturers, wholesalers and farmers to prepare early for the
arrival of soybean rust so that supplies of environmentally
preferred fungicides will be widely available."
of Illinois news release]