South Dakota: Farm income increases in 2010
April 1, 2011
The average farm saw a significant increase in net farm profit from 2009 to 2010 according to a statistical analysis of each farm/ranch enrolled in South Dakota’s Farm/Ranch Business Management (F/RBM) Program. The F/RBM Program is offered to farmers and ranchers through the South Dakota Center for Farm/Ranch Management at Mitchell Technical Institute at Mitchell. The purpose of the program is to assist farm and ranch operators in upgrading their management skills.
Average net farm profit of enrolled farmers increased to $260,891 in 2010. In comparing the averages from the South Dakota Center for Farm Ranch Management Annual Report and the data from the National Ag Statistic Service, enrolled F/RBM producers averaged 26 percent higher net farm profit in 2008 and 2009. The 2010 NASS data is not yet available. “Net farm profit represents dollars earned from the farm before business expansion, loan principal payments and family living expenses are paid,” said Roger DeRouchey, Farm Management Instructor at Mitchell Technical Institute. The average enrolled family farm spent $52,252 for living.
A number of factors contributed to the significant increase this year. A good plan for risk management is the number-one factor in maintaining and increasing profits along with rising yields, higher prices at harvest, and a profitable return on livestock enterprises all contributed to the increase in 2010.
Average progress was made towards increasing net worth or owner’s equity. An increase in equity of 15 percent was realized by the average farm in 2010. In 2009 the change in equity was an increase of 7.7 percent. Gains can occur as a result of investing farm income into capital assets or repaying debt. Further evidence of the range in profitability can be seen in equity change between high and low profit farms.
The South Dakota Center for Farm/Ranch Management is expanding its reach later in 2011 to include north central/eastern South Dakota. This follows the expansion of 2010 that included central/eastern South Dakota. This expansion was made possible in part due to the support of Farm Credit Services of America, South Dakota Corn Utilization Council, South Dakota Wheat Commission, South Dakota Soybean Research and Promotion Council, and the South Dakota Pork Producers Council. For more information about the data in this article or about the programs offered, call 1-888-647-1527.