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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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    Project to Study Soil Health Economics in South Dakota

    Soil degradation has become one of the most pressing global issues, because of its adverse effects on world food security, environment and quality of life. Farm management practices such as conventional tillage and monoculture cropping systems can directly damage soil health by causing erosion, carbon loss and nutrient depletion.

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    Does Growing Early Maturing Soybeans Fit in Your Rotation?

    Short growing seasons in South Dakota create difficulty for field activities following row crop harvest in the fall. Some crop producers in the state occasionally grow soybeans with varying maturity ratings for two major reasons: 1) to spread out the harvest resources in the fall, and 2) to avert any unpredicted weather circumstances such as early frost, mid-season hail occurrences, drought conditions, etc.

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    Why Precision Agriculture?

    When precision agriculture comes into a conversation a few questions arise. Three of those questions might be: What is precision agriculture? How does precision agriculture make our farm more profitable? What do I do with all this data?

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    1099 Tax Forms For Agriculture Producers

    Farmers and ranchers regularly pay for services from individuals who are not their fulltime employees. Typical compensation includes wages or other payments to self-employed workers and contractors, and rent paid to landowners. Under IRS regulations, a 1099 form should be issued to certain non-employees who perform services and are paid over $600 in a calendar year.

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    The Importance of Depreciation When Keeping Records for 2017 Taxes

    Depreciation is an important part of keeping records in agriculture. Depreciation is a reduction in the value of an asset over time, due to wear and tear. Things such as tractors, trailers, etc. all depreciate over time. Depreciation is also a way to make an income tax deduction to recover the cost of qualifying assets. Careful consideration of how to report tax depreciation helps producers comply with IRS regulations and can result in a reduction of income taxes paid.

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    Farm & Ranch Taxes: 2017 Changes

    Tax rules and regulations change annually, so it is important for producers and tax professionals to stay up to date. For 2017 there have been some changes to the farmers and ranchers tax guide. This article will highlight the majority of updates.

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    1099 Tax Forms For Agriculture Producers

    Farmers and ranchers regularly pay for services from individuals who are not their fulltime employees. Typical compensation includes wages or other payments to self-employed workers and contractors, and rent paid to landowners. Under IRS regulations, a 1099 form should be issued to certain non-employees who perform services and are paid over $600 in a calendar year.

    Read More »

    Farm & Ranch Taxes: 2017 Changes

    Tax rules and regulations change annually, so it is important for producers and tax professionals to stay up to date. For 2017 there have been some changes to the farmers and ranchers tax guide. This article will highlight the majority of updates.

    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.

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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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    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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    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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    1099 Tax Forms For Agriculture Producers

    Farmers and ranchers regularly pay for services from individuals who are not their fulltime employees. Typical compensation includes wages or other payments to self-employed workers and contractors, and rent paid to landowners. Under IRS regulations, a 1099 form should be issued to certain non-employees who perform services and are paid over $600 in a calendar year.

    Read More »

    The Importance of Depreciation When Keeping Records for 2017 Taxes

    Depreciation is an important part of keeping records in agriculture. Depreciation is a reduction in the value of an asset over time, due to wear and tear. Things such as tractors, trailers, etc. all depreciate over time. Depreciation is also a way to make an income tax deduction to recover the cost of qualifying assets. Careful consideration of how to report tax depreciation helps producers comply with IRS regulations and can result in a reduction of income taxes paid.

    Read More »

    Farm & Ranch Taxes: 2017 Changes

    Tax rules and regulations change annually, so it is important for producers and tax professionals to stay up to date. For 2017 there have been some changes to the farmers and ranchers tax guide. This article will highlight the majority of updates.

    Read More »

    Ag Sustainability in High School Classrooms: Professional development training

    In an effort to educate today’s youth about sustainable agriculture, SDSU Extension field specialists teamed up with educators from University of Nebraska Lincoln (UNL) and presented a four-hour training session for South Dakota high school teachers on January 5, 2018 at the SDSU Student Union.

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    2017-2018 La NiƱa & Winter Outlook

    The NOAA Climate Prediction Center has officially declared a La Niña Advisory, as of November 9, 2017. This means that La Niña conditions are observed and expected to continue. They observe La Niña conditions using sea surface temperatures in the Pacific Ocean and if weather patterns in the atmosphere are changing due to the ocean temperatures.

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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.

    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.

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