SD farmers' income drops 66 percent in 2016
A major blow to income has hit South Dakota farmers for the second year in a row, fresh data shows. The average farm enrolled in the program experienced a 66 percent drop in net farm income, decreasing from $38,898 in 2015 to $13,308 in 2016, acc...
A major blow to income has hit South Dakota farmers for the second year in a row, fresh data shows.
The average farm enrolled in the program experienced a 66 percent drop in net farm income, decreasing from $38,898 in 2015 to $13,308 in 2016, according to the South Dakota Center for Farm and Ranch Management at Mitchell Technical Institute. Following a multi-year trend, the average income dropped 77 percent between 2014 to 2015, marking a "doom and gloom" situation, said Will Walter, program director of the Farm/Ranch Business Management Program
"Margins are really tight because commodity prices are low and cost of production hasn't changed," Walter said.
To combat the problem, Walter said there need to be higher commodity prices, lower land costs and producers must take a more aggressive approach to marketing when opportunities arise in order to make a profit.
The average age of participating farm operators was 43.1 years old with 19.6 years of farming experience, and farm families in 2016 showed an average of $25,316 in non-farm income, up from $17,442 in 2015. And expenses for a family of three decreased, dropping from $65,923 in 2015 to $57,169 in 2016.
But there is a silver lining for young farmers entering the market.
The depressed market value of used machinery and lower prices of breeding stock can create "prime opportunities" for buying equipment, Walter said.
"A demand always exists for agricultural products because the world needs to eat ... As always with agriculture, you have to remain optimistic and hope for the best in the year to come."
Walter said the program's figures represent averages and there are farms and ranches with higher and lower returns.