SD ag secretary expects poor ag economy to continue
PIERRE — After seven months as South Dakota's secretary of agriculture, Mike Jaspers believes farmers' financial struggles could continue to grow.
Jaspers was appointed as secretary of agriculture by Gov. Dennis Daugaard on June 7, replacing Lucas Lentsch, who served since 2013. Jaspers took office on July 5, and a review of the department's Farm Loan Mitigation program wasn't encouraging for the near future.
The low-price environment led to a 10-year high in 2016 in requests to the program, which mitigates disputes between agricultural debtors and creditors, and Jaspers said numbers from January indicate the number will rise this year.
"I think things are going to get a little worse before they get better," Jaspers said.
Jaspers said low commodity prices affects the whole state. He said Gov. Dennis Daugaard found parallel changes between corn prices and revenue for the city of Sioux Falls, but of course, smaller communities are more heavily affected.
"However goes agriculture in South Dakota, so goes South Dakota," Jaspers said. "Agriculture definitely has a major impact on our state and even our state's largest city."
With commodity prices low, Jaspers said international trade has provided a major boon for agriculture, so he recommended federal officials reconsider the Trans-Pacific Partnership (TPP), or a similar proposal.
The TPP is a proposed trade partnership between the United States, Canada, Mexico, Australia, Japan, New Zealand, Chile and five other Pacific nations that failed to take effect after President Donald Trump withdrew the United States in January.
Trump has also been critical of the North American Free Trade Agreement (NAFTA) with Canada and Mexico, but Jaspers said agreements like TPP or NAFTA are important for agriculture.
"That's really been the thing that's been keeping us alive recently here, is we've had pretty darn good export markets for our raw commodities, whether it's on the meat side or the grains and things," Jaspers said. "We're in a global economy, and we're not going to turn back. We can't turn back anymore."
Jaspers expressed approval for Trump's nomination for secretary of the United States Department of Agriculture (USDA), former-Gov. Sonny Perdue, of Georgia. Jaspers said Perdue has good relationships with several South Dakotans, and although crops differ in the South and Midwest, Jaspers believes Perdue has plenty to offer the agriculture industry.
Jaspers is also keeping an eye on inflation, as well as an increasing need for equity, which could make farming impossible for fledgling farmers.
The average South Dakota farmer is about 57 years old, and Jaspers said there are fewer operators in the 40- to 50-age group, so as older operators retire, total farmers and ranchers in the state could decline.
There is a larger group of farmers in their 20s and 30s, but Jaspers said some young people could be dissuaded from taking up the mantle in the poor economic environment.
"It's going to probably deter some producers or some young folks that would like to get in and be active producers," Jaspers said. "All those things are going to factor into fewer producers. I think that's inevitable."
On average, South Dakota farmers set all-time record corn and soybean yields in 2016, with 161 and 49.5 bushels per acre, respectively, according to the USDA's National Agricultural Statistics Service.
They also set yield records in 2015, but with corn and soybean prices at their lowest in six to nine years, Jaspers said cash flow was low and farmers can't rely on record yields to save them every year.
But as far as the 2017 growing season goes, Jaspers said there is enough moisture in the ground to set up farmers and ranchers for another productive season.
Even with his secretarial duties, Jaspers keeps a close eye on the function of private operations thanks to crop and cattle operations of his own near Bridgewater in McCook and Hutchinson counties, as well as Marshall County in northeast South Dakota.
And with machinery prices starting to fall, Jaspers hopes South Dakota has begun to turn a corner for its largest industry.