Costs up, income down in 2013 on SD farms
An average farm in South Dakota experienced an increase in costs and a decrease in income by about 40 percent in 2013, according to data from Mitchell Technical Institute's South Dakota Center for Farm/Ranch Management.
According to the data, the average farm income in the state in 2013 was $141,973, compared to the 2012 average of $236,437. The data was compiled through the statewide program that assists producers with their recordkeeping and management offered through Mitchell Technical Institute. About 90 farms around the state use the MTI farm management program.
Jared Hofer, the director of the Farm Management Program at MTI, said Tuesday that the one-year dip in farm income is not of large concern.
"When you consider the costs of livestock feed prices last year and the decrease in crop prices, you can see where the income decrease would come from," Hofer said. "That said, it's something worth watching as we go forward."
This decrease in net farm income comes after only a slight increase in 2012 and is below the five-year average net income of $197,556.
Gross cash farm income of $1,061,552 showed a 2-percent decrease from the prior year. Similarly, total cash farm expense showed a 2-percent increase to $903,743, resulting in net cash farm income of $157,809, compared to $194,795 in 2012. Net cash farm income does not factor into changes in inventory, depreciation or capital sales and purchases and is figured by subtracting cash farm expenses from cash farm income.
The average age of participating operators was 44.4 years old, with an average of 21.9 years of farming experience. Hofer said that figure is steady to what it has been in recent years.
Living expenses for farm families was up in 2013 from the year before. A farm family averaging 3.8 members spent $70,094 in 2013, which increased from $62,940 in 2012. The farm families showed $19,512 in non-farm income, down only slightly from the prior year.
Owners showed an increase in net worth and owners equity of about 9 percent, or $186,695.
Liquidity measures such as working capital and current ratio both showed a decrease from 2012 but remain strong at $400,976 and 1.96 per operation, compared to $504,207 and 2.64 in the prior year.
Other numbers of note from 2013 data include average farm assets of $2,560,658 and equity of $1,639,344, resulting in a rate of return on assets of 5.1 percent and return on equity of 5.7 percent. Repayment capacity remains adequate with $55,910 and a resulting debt service coverage ratio of 1.93 and replacement margin ratio of 1.58.
The full report is available at www.sdcfrm.com.