Thune: High land prices might deter would-be farmers in South Dakota

Farm Forum

A new Congress will craft a new farm bill this year, and Sen. John Thune, R-S.D., said the measure will contain some provisions to encourage young farmers to get into agriculture.

What it won’t do, though, is address a major challenge for youthful would-be South Dakota farmers: the already high and increasing cost of land.

Speaking to about 150 people at an Aberdeen Area Chamber of Commerce Ag Committee luncheon at the Ramkota Convention Center on Jan. 11, Thune said there’s no good solution to the problem of increasing land prices. He noted that land in the Groton area recently sold for more than $13,000 an acre. With a cost that high, it’s pretty hard for a guy just getting into agriculture to make things pencil out.

Doug Sombke, who lives in the Conde area, agrees. He said he has three sons who would like to start farming. But even with the help of U.S. Department of Agriculture programs to assist young farmers, they couldn’t afford to buy 80 acres.

Duane Riedel of Aberdeen asked if there was a way to get some of the agland owned by out-of-state residents who have never been to South Dakota to see property they own into the hands of young, local farmers. Thune said that seems unlikely.

Considering that the state’s ag population is aging, it would be wise to encourage younger producers to get into the industry, Thune said. But land prices are prohibitive, he said.

While the Senate passed a farm bill last year, the House did not. That’s why work on the measure has to start over, Thune said. The current farm bill has been extended a year. A new, multiyear program would be much more beneficial for ag producers young and old as they try to plan for the future, Thune said.

The new plan needs to include, among other things, strong crop insurance and conservation programs, Thune said. Last year’s Senate plan included $25 billion in cuts to farm programs, something that most producers in the Dakotas understood was necessary.

On the upside, Thune said, he thinks the agriculture industry is ripe for continued growth, which would be good for South Dakota’s economy. The world’s population is increasing by 80 million people a year, pushing a need for increased food production, he said.

The renewable fuels standard — a portion of federal energy policy that dictates the increased production of renewable fuels such as ethanol — will be targeted by opponents, Thune said. But, he said, while it’s taken more time than planned, the nation is making progress in implementing the production and use of more E-15 fuel. That’s a blend that’s 85 percent gasoline and 15 percent ethanol. Most blended fuel now contains 10 percent ethanol.

Thune noted that POET Energy’s Emmetsburg, Iowa, plant is a pilot cellulosic ethanol plant. Cellulosic ethanol is produced from corn cobs and other corn residue as opposed to corn kernels.

Such undertakings will help counter the concerns some have about traditional ethanol production and the renewable fuels standard, he said.