2013 South Dakota crop trends

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Farm Forum

According to the recently released Annual Report by the South Dakota Center for Farm/Ranch Management at Mitchell Technical Institute, the 2013 price per unit of crops sold was substantially lower than the escalated prices seen in 2012. However, the lower price was favorably offset by increased production available for sale and more inventory for the average farm at the end of 2013. These inventory changes of current assets, along with cash received, are an integral part of determining the annual net farm income of the farms participating in the program.

Alfalfa was the most profitable crop in 2013 with a return per acre of $327. This resulted from adequate rainfall and a high price received due to the need to rebuild hay stocks across the region. For the first time in four years, corn fell behind soybeans in return/acre. The average acre of soybeans returned $190 versus corn at $108. The yield for corn, on average, was 154 bu/acre, an increase of 77% from the 2012 yield of 87 bu/acre. Soybeans averaged 43.5 bu/acre compared to 27.3 in 2012, an increase of 59%. In contrast, the harvest prices for 2013 were $3.85 for corn and $12.15 for soybeans, compared to $7.00 and $15.00 respectively in 2012. The corn price decreased by 45% and the soybean price fell by 19%.

“An interesting fact to note is that the high 20% and low 20% return corn fields, on cash rented ground, both had an average yield of 147 bu/acre; however, the high returning fields had $213 less expense. You may suspect that this is largely due to higher cash rent, but the differences from the high 20% to the low 20% were as follows: $96 more per acre for seed, fertilizer and pesticides; $37 more rent; $61 more in other direct costs; and $37 more overhead costs,” stated Will Walter, an instructor for the farm management program based at MTI. He adds, “Knowing these costs for each of your farm’s enterprises and being aware of how they compare to other operations is crucial to remaining profitable in an increasingly challenging and high risk agriculture sector.”

Wheat had lower yields and lower prices to produce a substantial drop in return per acre. Winter wheat, after a great year in 2012, showed a 64% drop in return per acre at $114; spring wheat a 77% decrease with a return per acre of just $34. Oats, a smaller player in recent years, obtained a $142 return/acre in 2013 from the fields represented in the program.

“Rather than dwelling on the fact that prices are lower, farmers need to know their breakeven price and stay focused on marketing their remaining 2013 crop as well as their 2014 production at levels that guarantee a profit.” encouraged Walter. “The high harvest price for 2012 was created by the short crop nationwide. Our farms in South Dakota need to be prepared because we can have a substantial loss locally, but have little effect on the national price.”

More information on the 2013 South Dakota Annual Report can be found on the South Dakota Center for Farm/Ranch Management’s website at www.sdcfrm.com or by contacting the Center at 605-995-7196 or sdcfrm@mitchelltech.edu.