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    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.

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    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.

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    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.

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    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.

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    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.

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    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.

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    2017 South Dakota Pasture Cash Rental Rates

    Average cash rental rates per-acre reflect regional differences in productivity and carrying capacity of pasture and rangeland tracts, with fluctuations in the commodity markets and potential profits, affecting cash rental rates.

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    Planting Winter Wheat Into Dry Soil

    The most recent drought monitor still shows much of Western South Dakota in varying stages of drought with the worst conditions centered on eastern Meade and Pennington into Haakon and Ziebach counties. As a result, many farmers may find themselves planting winter wheat into dry soils, which poses a number of challenging options that should be considered.

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    2017 SDSU Land Value Cash Rental Rate Overview

    According to the 2017 SDSU Farm Real Estate Market Survey average cropland value for the state is $3,903, down 4.7% from 2016. Cropland values saw continued pressure due to low margins for cropland production. Pasture land was steady to slightly down with a decrease of 0.6% and with state average value of $1,215.

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    Changes to the 2017 Ag Land Value Survey

    This year marked a year of changes for the SDSU land value survey. The survey was condensed down to incorporate alfalfa hay into crop land and pasture/rangeland now incorporates all grass acres including tame pasture. These changes were made to better reflect the current land use in the state.

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    South Dakota Climate & Drought Summary

    As of August 3, 2017, just over 82% of South Dakota is in drought. The area of drought has hovered around 80 percent for the last few weeks. The South and Southeast have gradually worsened recently, due to both dryness and heat.

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    Salvaging Drought Stressed Corn in Mid-Summer

    As drought conditions deepen in South Dakota and the surrounding region, many producers are evaluating the status of their corn crop and feed supplies. In some instances the likelihood of corn making a harvestable grain crop is so low that the best option is to take an early forage harvest.

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    Making Cropping Decisions After Hail Storms

    Recent hail storms have brought crop injury in isolated parts of South Dakota. We always hope the old ‘white combine’ adage does not come true, but there is no stopping mother nature. For those effected by serious hail damage, sometimes the next steps are hard to determine.

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    Precipitation Deficit Tool Available

    As of July 5, much of Central and Western South Dakota is listed in Moderate to Severe Drought, with the North Central part of the state affected hardest. One tool to make these categories a bit more tangible is the Drought Termination and Amelioration Application developed by the National Oceanic and Atmospheric Administration (NOAA).

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    2017 South Dakota Pasture Cash Rental Rates

    Average cash rental rates per-acre reflect regional differences in productivity and carrying capacity of pasture and rangeland tracts, with fluctuations in the commodity markets and potential profits, affecting cash rental rates.

    Read More »

    2017 SDSU Land Value Cash Rental Rate Overview

    According to the 2017 SDSU Farm Real Estate Market Survey average cropland value for the state is $3,903, down 4.7% from 2016. Cropland values saw continued pressure due to low margins for cropland production. Pasture land was steady to slightly down with a decrease of 0.6% and with state average value of $1,215.

    Read More »

    Changes to the 2017 Ag Land Value Survey

    This year marked a year of changes for the SDSU land value survey. The survey was condensed down to incorporate alfalfa hay into crop land and pasture/rangeland now incorporates all grass acres including tame pasture. These changes were made to better reflect the current land use in the state.

    Read More »

    Breakeven Yields: Corn & Soybeans

    The 2016 U.S. crop-year showed record acreage for soybeans and a large acreage for corn. The combination of more acres, warm temperatures, and adequately-timed rainfall events, resulted in also record yields. According to the NASS stocks for corn and soybeans have been increasing since 2014, a trend that’s likely to continue in 2017.

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    The Cost of Late Calvers

    Pounds of beef sold is a key number for cattlemen. Late calvers the cows that drag out the calving season, may cost producers more than extra work and management, they may actually be costing dollars. Standardized Performance Analysis (SPA) has been around for decades. This tool helps determine what the actual costs to raise a calf from breeding to weaning. Many producers create a budget for marketing and financing purposes, but SPA calculates the real, final costs.

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    Expectations of Farm Income

    Two methods of measuring farm income are used and reported on by the United States Department of Agriculture (USDA) and other reporting sources, Net Cash Farm Income and Net Farm Income. While the two use very similar words, the formulas and use of them is different, and should be understood when reading reports regarding one or the other to discuss and understand the current farm income situation.

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    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.

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    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.

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    2017 South Dakota Pasture Cash Rental Rates

    Average cash rental rates per-acre reflect regional differences in productivity and carrying capacity of pasture and rangeland tracts, with fluctuations in the commodity markets and potential profits, affecting cash rental rates.

    Read More »

    2017 SDSU Land Value Cash Rental Rate Overview

    According to the 2017 SDSU Farm Real Estate Market Survey average cropland value for the state is $3,903, down 4.7% from 2016. Cropland values saw continued pressure due to low margins for cropland production. Pasture land was steady to slightly down with a decrease of 0.6% and with state average value of $1,215.

    Read More »

    Changes to the 2017 Ag Land Value Survey

    This year marked a year of changes for the SDSU land value survey. The survey was condensed down to incorporate alfalfa hay into crop land and pasture/rangeland now incorporates all grass acres including tame pasture. These changes were made to better reflect the current land use in the state.

    Read More »

    South Dakota Climate & Drought Summary

    As of August 3, 2017, just over 82% of South Dakota is in drought. The area of drought has hovered around 80 percent for the last few weeks. The South and Southeast have gradually worsened recently, due to both dryness and heat.

    Read More »

    Precipitation Deficit Tool Available

    As of July 5, much of Central and Western South Dakota is listed in Moderate to Severe Drought, with the North Central part of the state affected hardest. One tool to make these categories a bit more tangible is the Drought Termination and Amelioration Application developed by the National Oceanic and Atmospheric Administration (NOAA).

    Read More »

    Farmers and Ranchers Needed for Survey

    SDSU Extension is devoted to meeting the needs of South Dakota farmers and ranchers in the state. If you are 18 years-of-age or older and farming or ranching is your occupation, please consider completing a 10-15 minute survey that would help us acquire information to design and implement future programs to serve farm and ranch families.

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    Drought and Heat Effects on Corn Production

    Nearly every season in South Dakota has periods of hot, dry weather in at least part of the state. If this hot and dry weather occurs during corn pollination and fertilization, negative effects on yield may be substantial. Yields may be reduced at any point in the growing season when water usage exceeds supply. Early season drought stress may reduce total plant size, ear size, and the number of rows of kernels on the ear.

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    FSA Programs for Drought Assistance

    Drought conditions across a growing number of South Dakota counties have many livestock producers facing forage shortages. The Agriculture Act of 2014, most commonly known as the 2014 Farm Bill, includes programs designed to assist livestock producers facing extended drought conditions.

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    FSA Disaster Assistance During Times of Drought

    As drought conditions continue, counties within the hardest hit areas have an opportunity to apply for emergency funding for farmers and ranchers requiring assistance with water relief and water conservation measures through the USDA Farm Service Agency.

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    Annual Forages for Feed

    With the early onset of drought, many livestock producers are concerned about feed supplies. Annual forages may be an option for producers on unplanted fields with good moisture reserves or on failed fields when soil moisture levels improve.

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