South Dakota farm income increases in 2012
The average farm saw a 3.3% increase in net farm profit from 2011 to 2012 according to financial information provided by farmers enrolled in South Dakota’s Center for Farm/Ranch Management Program. The Farm/Ranch Business Management Program is offered to farmers and ranchers throughout the entire state of South Dakota and administrated by Mitchell Technical Institute. The purpose of the program is to assist farm and ranch operators in upgrading there management skills.
Average net farm profit of enrolled farmers was $228,908 in 2011 and increased to $236,437 in 2012. Net farm profit represents dollars earned from the farm before business expansion, loan principal payments and family living expenses are paid, says Roger DeRouchey, Farm Management Instructor at Mitchell Technical Institute. The average enrolled family farm spent $62,940 for living but also earned $20,886 from non-farm sources. Non-farm income helps for covering family expenses in today’s farming, says DeRouchey.
A number of factors contributed to the increase. The farming 2011 year was very good in both the livestock and crop enterprises. In the 2012 year the livestock enterprises just broke even with the higher feed input prices, and the higher harvest time grain and feed prices helped the crop enterprises as most farmers had bought up on their crop insurance coverage levels.
Good progress was made towards increasing net worth or owner’s equity. A change in equity of $218,062 was realized by the average farm, a 14% increase in 2012. In 2011 the change in equity was an increase of $234,570 or 16%. Gains can occur as a result of investing farm income into capital assets or repaying debt. Further evidence of the range of profitability can be seen in the equity change between the high and low profit farms.
If you would like more information about the 2012 South Dakota Annual Report please contact the South Dakota Center for Farm/Ranch Management at http://www.mitchelltech.edu/sdcfrm or call us at 1-800-684-1969.