Farmers Play Vital Role in Economic Development For Rural Communities

MITCHELL --- The final results are in for the 2015 Annual Report which provides a summary of financial data from farms enrolled in the SD Farm/Ranch Management program.

Overall, the average operation saw cash expenses reach $887,312 which is down slightly from the prior year. Cash farm income of $1,016,995 also showed a small decrease which resulted in net cash farm income slipping again for the fourth consecutive year. Both cash grain prices and the value of market livestock dropped rather dramatically which has resulted in cash farm income falling to levels not seen since 2009.

For most farms enrolled in the program, livestock production still ranks as the top source of revenue and it therefore represents the biggest area of expenses with about $366,000 in direct costs. Most of these dollars are spent purchasing feeder livestock and buying feed products. It should be noted that this activity is a real economic engine for our area as most of the feed is produced and processed in South Dakota.

In 2015, crop production expenses totaled $200,124 with the bulk of those dollars spent on seed, fertilizer, chemical, and crop insurance. Even though crop prices were much lower throughout 2015, the cost of production has not declined much from one year ago with those inputs totaling $252/acre for corn and $137/acre for soybeans. Many farmers now rely on a variety of outside consultants and this supports several people who are employed by local farm cooperatives and other private agricultural companies.

The other largest expense is farm land rent and landlords have benefited from a very competitive land market with the average producer paying over $100,000 in cash rents during 2015. Another important industry that farmers support is implement dealers, farm supply businesses, and local repair shops. The average farm spent $50,000 in repairing equipment last year. The one bright spot in operating expenses was fuel costs, which were down across the board. Another critical area for many farmers is keeping reliable employees on the payroll and hiring custom operators to assist with planting, harvesting, spreading manure, etc. According to our data, the average farm operation spent $43,000 for those services last year.

In addition to spending close to $900,000 in operating costs, farmers invested an average of $118,000 in capital purchases such as land, buildings, machinery, and breeding livestock. Family living expenses came in $7,000 higher than last year at $65,923 with close to 20 percent of those dollars being spent on healthcare.

Overall, the average farm spent close to $1,100,000 in the areas noted above which explains why agriculture plays a major economic role in communities throughout South Dakota.

The Farm/Ranch Business Management Program is offered to farmers and ranchers in South Dakota through Mitchell Technical Institute. The purpose of the program is to assist farm and ranch operators in upgrading their management skills. The program is now available to producers across the state.

For more information about the data in this article or about the programs offered, call 1-605-995-7191 or send an email to

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