Overall favorable growing conditions in 2018 contributed to good crops for South Dakota farmers. It certainly was a challenge to get those crops harvested in many areas due to excess moisture and lack of drying conditions. Alfalfa, though not as prevalent as corn or soybeans, was the most profitable of crops produced on farms enrolled in the SD Center for Farm/Ranch management program. A yield of 3.53 tons/acre valued at $109/ton against total listed expenses of $223/acre generated a net return of $162/acre.
Soybeans averaged a net return of $124/acre, much higher than $38/acre in 2017. The average yield of 54.61 bushels/acre coupled with the Market Facilitation Payments (MFPs) generated a gross income of $494/acre. The average yield in 2017 was 44 bushels/acre. The total cost of production for an acre of soybeans was $370 up from $323 in 2017.
On fields included in the enterprise analyses, corn averaged 175.46 bushels/acre with an average price of $3.21 (calculated by fall sales and ending inventory values) and along with some miscellaneous income grossed $589/acre. The total expense for corn was $473/acre giving it a net return of $116/acre. In 2017 the average yield was 143 bushels/acre causing a minus-$7/acre net return.
"Timely rainfall for many and an increase in price over last year accounted for this. Higher returns from 53 bushels more yield valued at a slightly higher price received, coupled with lower costs, made the high 20 percent and low 20 percent vary from a $213 profit to a negative $55/acre," said Will Walter, instructor at Mitchell Technical Institute.
The high 20 percent return corn fields yielded 185 bushels/acre and the low 20 percent return corn fields 131. On the high return 20 percent, the total cost per acre was $419/acre compared to $482 on the low 20 percent.
"It is crucial for each producer to maximize the return on investment of inputs," Walter said. "Comparing all of your costs and corresponding returns to what is average, high or low in each expense category can provide a valued reference. Yes, each year is different, but trends will show that maximum inputs don't always equal maximum returns."
At this writing, 2019 fall delivery bids exist at $3.20 corn and $8.00 soybeans. Producers can't plan on an MFP in 2019, but can certainly hope for foreign trade resolutions to support the prices received for U.S. commodities.
With a much smaller subset of data than corn and soybeans, the average return per acre of winter wheat was just $8/acre. The average yield was 57 bushels/acre which was similar to 2017. Oats showed a loss of $9/acre. It seems the shortened spring season of 2018, wet early and then hot temperatures early in summer, made small grains suffer. Other crops, with lower instances, often are unique to a small group of operations.