The financial crash of the 1980’s has been attributed to changes in producer’s balance sheets, due to a decline in land prices. After this time, a two-column balance sheet was developed to help prevent that type of balance sheet collapse from occurring in the future.
In Part 1 of The Missing Management Component we covered the difference an accounting system makes on the Net Income Calculation. The Jones and Smith farms were equal in Net Cash Income, but there was a large discrepancy when the Accrual Method was used to include inventory changes and calculate the Net Income.
It is fair to say that many ag producers do not like bookwork. Many times this job gets pushed to the side, until a bill is due or taxes need to be filed. It is also fair to say it is a missing component to the management of most operations.
The SDSU agricultural land value survey collected 2018 data statewide for cow-calf pairs and yearling monthly pasture rental rates based on South Dakota regions. The cow-calf pair statewide weighted average in 2018 was $48.41 with a high of $61.63 and a low of $35.26.
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.
The gross rate of return to pasture versus cropland widened in 2018 to a 1.1 percentage point difference compared to 2017. Pasture/rangeland gross rate of return reported in the 2018 survey is 2.4% and for non-irrigated cropland is 3.5% compared to 2017 rates of return at 2.8% for pasture and 3.5% for non-irrigated cropland.
According to the 2018 SDSU Farm Real Estate Market Survey statewide change in average cash rental rates per-acre from 2017 to 2018 was positive for cropland and unchanged for pasture/rangeland.
In response to the flooding in South Dakota, iGrow has put together a collection of news updates, articles, and flood relief information to help get your farm and community on the path to recovery.
Grazing prices for summer 2018 in Western South Dakota for cow/calf pairs are steady to $10.00 higher. According to USDA-AMS some land owners went up to either cover costs of higher taxes or if full care of the land is included.
The recent decline in fed cattle prices has producers wondering about calf prices for this fall. Higher beef production levels in the short run are a likely cause of lower fed cattle prices.