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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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    Cover Crops & Livestock Integration: An opportunity for profit on S.D. farms

    Cover crops have been gaining a reemerging acceptance over the last decade, with very few producers disagreeing about the potential soil health benefits of adding cover crops to their farming operation. However, with low commodity prices producers are trying to reduce expenses on inputs, especially on inputs with a varying or unknown return.

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    2017 Rates of Return to Land

    According to results from a farm real estate survey conducted by agricultural economists at South Dakota State University, cash rates-of-return for all uses of agricultural land in the state declined slightly during the 1990’s and declined substantially from 2001 to the present.

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    Fall Frost/Freeze Dates 2017

    Around this time of year, South Dakotans are expecting a hard frost to bring a conclusion to the growing season. Late September and early October are the average fall frost dates for most areas of the state, particularly in the Eastern Regions.

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    Fall Climate Outlook 2017

    Fall harvest season is upon us, although the corn and soybean crops are slow to mature and dry down this year. Corn in the East Central Region has been slow to progress this year, as it has been behind average on accumulating growing degree days throughout the late summer.

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    2017 South Dakota Agricultural Land Values

    There is considerable variation in land values within each Region and for each non-irrigated agricultural land use. For example, 2017 cropland values in the East-Central region vary from an average of $4,186 (in the Sanborn, Davison, Hanson and Kingsbury cluster) per-acre for low-productivity cropland to $9,025 (Minnehaha-Moody cluster) per-acre for high-productivity cropland.

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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 Rates of Return to Land

    According to results from a farm real estate survey conducted by agricultural economists at South Dakota State University, cash rates-of-return for all uses of agricultural land in the state declined slightly during the 1990’s and declined substantially from 2001 to the present.

    Read More »

    2017 South Dakota Agricultural Land Values

    There is considerable variation in land values within each Region and for each non-irrigated agricultural land use. For example, 2017 cropland values in the East-Central region vary from an average of $4,186 (in the Sanborn, Davison, Hanson and Kingsbury cluster) per-acre for low-productivity cropland to $9,025 (Minnehaha-Moody cluster) per-acre for high-productivity cropland.

    Read More »

    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.

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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.

    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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    Cover Crops & Livestock Integration: An opportunity for profit on S.D. farms

    Cover crops have been gaining a reemerging acceptance over the last decade, with very few producers disagreeing about the potential soil health benefits of adding cover crops to their farming operation. However, with low commodity prices producers are trying to reduce expenses on inputs, especially on inputs with a varying or unknown return.

    Read More »

    2017 Rates of Return to Land

    According to results from a farm real estate survey conducted by agricultural economists at South Dakota State University, cash rates-of-return for all uses of agricultural land in the state declined slightly during the 1990’s and declined substantially from 2001 to the present.

    Read More »

    Fall Frost/Freeze Dates 2017

    Around this time of year, South Dakotans are expecting a hard frost to bring a conclusion to the growing season. Late September and early October are the average fall frost dates for most areas of the state, particularly in the Eastern Regions.

    Read More »

    Fall Climate Outlook 2017

    Fall harvest season is upon us, although the corn and soybean crops are slow to mature and dry down this year. Corn in the East Central Region has been slow to progress this year, as it has been behind average on accumulating growing degree days throughout the late summer.

    Read More »

    2017 South Dakota Agricultural Land Values

    There is considerable variation in land values within each Region and for each non-irrigated agricultural land use. For example, 2017 cropland values in the East-Central region vary from an average of $4,186 (in the Sanborn, Davison, Hanson and Kingsbury cluster) per-acre for low-productivity cropland to $9,025 (Minnehaha-Moody cluster) per-acre for high-productivity cropland.

    Read More »

    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 »

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