Profit Tips

Resource Library

  • Publications
  • Articles
  • Videos
  • News
  • Events

    Ag Land Values Decrease Statewide on Average

    From 1991 to 2015, agricultural land values in South Dakota, and in most other major agricultural production states, appreciated each year. In 2016 on average all agricultural use land decreased in South Dakota except rangeland, which will be discussed in a future article.

    Read More »

    Decrease in Gross Cash Rent to Value Ratio: What does it mean for SD land investors?

    The current average cash rent to value rates of return on agricultural land in South Dakota remain very low. The rent to value (RTV) ratio is calculated by taking the cash rent per acre divided by the land value per acre. This calculation is an approximation for how rapidly an asset will pay for itself. The 2016 average RTV of land value was 2.7% for all agricultural land. Categorically, the average was 3.3% for cropland, and 2.4% for rangeland. During the 1990s, the same ratios were 7.4% for all agricultural land, 8.0% for cropland, and 6.8% for rangeland.

    Read More »

    Working Capital for South Dakota Farms

    Many farms in South Dakota built working capital and financial reserves between 2009 and 2012, a recent period of relatively high returns. Since 2013 the strong working capital position has been on a downward trend. Figure 1 shows average working capital positon per acre of farms enrolled in South Dakota Center for Farm and Ranch Management (SDCFRM) program.

    Read More »

    Key Corn Production Costs Trends and Rent

    Crop production costs have not adjusted to the decrease in revenues received from them. The major costs (direct and fixed) which include seed, fertilizer, machinery, management and labor and cash rent, have not decreased as much as the revenues that farm operators have received in recent years. The costs for 2015 did decline from 2014 with most of the decrease coming from fertilizer and cash rent. Cost control will need to continue in 2017 as revenues are down and Agricultural Risk Coverage (ARC-CO) payments will likely decrease.

    Read More »

    Crop Rental Rates Down for Second Year in 2016

    This past year crop rental rates declined state wide compared to 2015. In 2015 the average rental rate for cropland across South Dakota was $145.10 per acre in 2016 the average was $141.00 per acre. This is a 2.8% decrease in the cropland rental rate state wide. This follows up a 3.3% decrease in 2015 as well. Some regions, such as the Northeast had greater decreases (12%), while others such as the Southwest had lower decreases (1.9%). The continuation of the decrease in crop rental rates is likely due to the current economic conditions.

    Read More »

    2016 Farm Family Income Expectations: What they mean

    The 2016 forecast of national net farm income was recently released by the USDA Economic Research Service (ERS). The ERS estimates a 3 percent decline compared to 2015 income figures. This is a potential decrease of $1.65 billion dollars in net farm income, a reduction in farm income from $56.45 billion in 2015 to $54.8 billion in 2016.

    Read More »

    Bringing the Next Generation Back - Part 1: Wealth Distribution

    Answering the tough questions about transitioning the operation to the next generation is an important step for farm families. It is also a step that is often missed. “It’s family, it will all work itself out” is a common myth believed by fathers, sons, moms and daughters. This perception sets the family up for discord, unfavorable work conditions and the failure of the operation to pass to the next generation. Those three situations are rarely the goals the family has for personal relationships or the business.

    Read More »

    Compared to What? Interpreting Research Results

    In this information age, farmers may find it challenging to identify trustable sources. There are many companies trying to sell products attached to claims that may or may not be true. It is important for farmers to find a path through the hype and be able to determine if a product will benefit them or not. Statistical analysis is one way to separate fact from fiction.

    Read More »

    Four Steps to Clear Communication

    The greatest challenge with communication is remembering to do so! Busy times around farms, ranches and agri-business companies, lend us to often forget to actually communicate with those we work with. We think— I’ll just send a text and they will know what project I’m working on. A text can definitely provide an update, but when communication calls for a face-to-face discussion, how can one build an environment conducive to effective communication?

    Read More »

    Let’s talk about your record keeping

    Income tax season is a favorite for producers near and far (note the level of sarcasm in this statement). While it is a time to collect all the forms mailed to you, review all the forms you need to mail out and determine taxable income and deductible expenses, it is also a good time to evaluate the profitability of your operation.

    Read More »

    Winter Wheat Breaking Dormancy Early

    February 2017 will go down in the record books as one of the warmest Februaries on record, not just in South Dakota, but across the United States. Some Eastern parts of the state will end up more than ten degrees above average for the month. The Western region will end February around two to six degrees above average.

    Read More »

    Crop Diversification Potential: Improving Soil Health & Farm Profitability

    Two-year corn-soybean rotation coupled with heavy chemical inputs has become the routine practice of agricultural production in the Midwestern United States. According to USDA/NASS data, corn and soybean prices received by producers in South Dakota both reached the peak levels of $7.39 and $16.00 per bushel, respectively, in August, 2012. Such unprecedented price has driven up the acreage planted for corn and soybean, at the expense of other crops and grassland.

    Read More »

    Who Manages Your Business?

    January is behind us, hopefully taking the bitter cold with it. One thing will not move out with the running of the calendar is the need for producers to become better farm managers. The low market price trend is expected to last through 2017, into 2018. Managers will survive, and maybe thrive, based on the decisions and actions they make. Those viewing themselves as “just farmers” may not.

    Read More »

    Cover Crop Adoption: Farmers’ perceived benefits & barriers

    Cover crops are generally defined as crops planted between cash crops to cover and protect the soil. Some demonstrated benefits of cover crops include: reduced soil erosion, increased soil organic matter, increased biological diversity, increased nitrogen supply, and weed control. Depending on the farmers’ objectives, different species of cover crops can be planted. For example, if a farmer’s main objective is to increase nitrogen supply, then legume cover crops best suited to the farm area should be selected.

    Read More »

    Farm & Ranch Taxes: 2016 Changes

    Tax rules and regulations change annually, so it is important for producers and tax professionals to stay up to date. For 2016 there have been some changes to the farmers and ranchers tax guide. This article will highlight the majority of the 2016 updates.

    Read More »

    Farm & Ranch Taxes: 2016 Changes

    Tax rules and regulations change annually, so it is important for producers and tax professionals to stay up to date. For 2016 there have been some changes to the farmers and ranchers tax guide. This article will highlight the majority of the 2016 updates.

    Read More »

    Insuring Corn and Other Spring Crops

    With producers evaluating marketing strategies and the looming March 15 insurance sales deadline, several trends are emerging. By monitoring these trends, producers may be able to refine their marketing plans for corn, soybeans and spring wheat. New crop futures prices are tallied during February and their average during the month determines the projected price for insurance purposes.

    Read More »

    Ag Land Values Decrease Statewide on Average

    From 1991 to 2015, agricultural land values in South Dakota, and in most other major agricultural production states, appreciated each year. In 2016 on average all agricultural use land decreased in South Dakota except rangeland, which will be discussed in a future article.

    Read More »

    Decrease in Gross Cash Rent to Value Ratio: What does it mean for SD land investors?

    The current average cash rent to value rates of return on agricultural land in South Dakota remain very low. The rent to value (RTV) ratio is calculated by taking the cash rent per acre divided by the land value per acre. This calculation is an approximation for how rapidly an asset will pay for itself. The 2016 average RTV of land value was 2.7% for all agricultural land. Categorically, the average was 3.3% for cropland, and 2.4% for rangeland. During the 1990s, the same ratios were 7.4% for all agricultural land, 8.0% for cropland, and 6.8% for rangeland.

    Read More »

    Key Corn Production Costs Trends and Rent

    Crop production costs have not adjusted to the decrease in revenues received from them. The major costs (direct and fixed) which include seed, fertilizer, machinery, management and labor and cash rent, have not decreased as much as the revenues that farm operators have received in recent years. The costs for 2015 did decline from 2014 with most of the decrease coming from fertilizer and cash rent. Cost control will need to continue in 2017 as revenues are down and Agricultural Risk Coverage (ARC-CO) payments will likely decrease.

    Read More »

    Crop Rental Rates Down for Second Year in 2016

    This past year crop rental rates declined state wide compared to 2015. In 2015 the average rental rate for cropland across South Dakota was $145.10 per acre in 2016 the average was $141.00 per acre. This is a 2.8% decrease in the cropland rental rate state wide. This follows up a 3.3% decrease in 2015 as well. Some regions, such as the Northeast had greater decreases (12%), while others such as the Southwest had lower decreases (1.9%). The continuation of the decrease in crop rental rates is likely due to the current economic conditions.

    Read More »

    The ‘Other’ Dakota Leads the Nation in Economic Growth

    It was a surprise when I read this headline a couple of months ago in the Wall Street Journal. We have been used to read about the oil boom in North Dakota and the incredible pace of its economic growth in the past several years. The refreshing surprise however was that the “other Dakota” referred to in that article was South Dakota! And what was even more important was that 75% of that growth came from agriculture.

    Read More »

    2016 Farm Family Income Expectations: What they mean

    The 2016 forecast of national net farm income was recently released by the USDA Economic Research Service (ERS). The ERS estimates a 3 percent decline compared to 2015 income figures. This is a potential decrease of $1.65 billion dollars in net farm income, a reduction in farm income from $56.45 billion in 2015 to $54.8 billion in 2016.

    Read More »

    Northeast South Dakota: 2016 Potential Crop Profitability

    An analysis of the potential profitability of crops for 2016 for Northeast South Dakota was performed. This study examined returns given modified South Dakota State University Extension crop budgets for central & east mid production areas that include estimates for both direct and fixed costs.

    Read More »

    Five Tips on Time Management

    Have you ever heard anyone say they are not busy? I am guessing not. No matter how much technology we have at our finger tips or improved ways to complete an agricultural related task, you won’t find many people saying they don’t have their plate full or even over-flowing. Heavy workloads, and the feeling of being overwhelmed or stressed does not may our days very enjoyable. Is the reason for always seeming busy a time management issue? and learning some important tips to help your organize your time and help with focus.

    Read More »

    Farming Strategies for the Future

    There was a time in agriculture when greater yields always meant greater profitability. Today’s economic environment is characterized by high input costs and depressed commodity prices. Under this scenario when the optimum input/output relationship has been attained, more inputs do not necessarily result in greater returns on investment. Therefore, todays’ agriculture paradigm requires management that addresses production “optimization”. This is the point where a previously known level of inputs maximizes outputs before incurring into greater investments that result into diminishing returns.

    Read More »

    Three ways to understand difficult people

    Managers and supervisors have many challenges to deal with daily in order to strive to help their company reach goals, be productive, and profitable. One of these challenges is dealing with difficult people. Their ability to lead difficult employees, which create an unproductive working environment and shift the employee into a high performing worker is an important skill for managers.

    Read More »

    Bringing the Next Generation Back - Part 1: Wealth Distribution

    Answering the tough questions about transitioning the operation to the next generation is an important step for farm families. It is also a step that is often missed. “It’s family, it will all work itself out” is a common myth believed by fathers, sons, moms and daughters. This perception sets the family up for discord, unfavorable work conditions and the failure of the operation to pass to the next generation. Those three situations are rarely the goals the family has for personal relationships or the business.

    Read More »

    Compared to What? Interpreting Research Results

    In this information age, farmers may find it challenging to identify trustable sources. There are many companies trying to sell products attached to claims that may or may not be true. It is important for farmers to find a path through the hype and be able to determine if a product will benefit them or not. Statistical analysis is one way to separate fact from fiction.

    Read More »

    Four Steps to Clear Communication

    The greatest challenge with communication is remembering to do so! Busy times around farms, ranches and agri-business companies, lend us to often forget to actually communicate with those we work with. We think— I’ll just send a text and they will know what project I’m working on. A text can definitely provide an update, but when communication calls for a face-to-face discussion, how can one build an environment conducive to effective communication?

    Read More »

    Let’s talk about your record keeping

    Income tax season is a favorite for producers near and far (note the level of sarcasm in this statement). While it is a time to collect all the forms mailed to you, review all the forms you need to mail out and determine taxable income and deductible expenses, it is also a good time to evaluate the profitability of your operation.

    Read More »

    Who Manages Your Business?

    January is behind us, hopefully taking the bitter cold with it. One thing will not move out with the running of the calendar is the need for producers to become better farm managers. The low market price trend is expected to last through 2017, into 2018. Managers will survive, and maybe thrive, based on the decisions and actions they make. Those viewing themselves as “just farmers” may not.

    Read More »

    Farm & Ranch Taxes: 2016 Changes

    Tax rules and regulations change annually, so it is important for producers and tax professionals to stay up to date. For 2016 there have been some changes to the farmers and ranchers tax guide. This article will highlight the majority of the 2016 updates.

    Read More »

    Sign Up For Email!

    • Field Staff Listing
    • South Dakota 4HOnline