“Down” on the Farm?
South Dakota towns and cities dependent on manufacturing jobs have suffered the most from the economic malaise of 2008-2009, but overall the state's economy has plodded along better than most. There are several reasons why we've escaped the worst. We never got carried away with housing prices, of course. Our people are generally more cautious and practical than the average American.
And we have enjoyed a booming farm economy.
It has often been said that they even spend a lot of money when they are not making so much — and we're about to test that theory because profits are going down on the farm according to last Friday's Wall Street Journal.
Journal writers quoted ag department experts who think that farm profits may fall 38% this year. Net farm income is expected to drop to $54 billion this year, down $33.2 billion from 2008 when high oil prices resulted in higher corn prices thanks to ethanol. That is a sobering $9 billion lower than the 10-year average.
Dairy, hog, wheat, soybean and corn farmers will be among the hardest hit if conditions continue as they are. Hog farmers are losing as much as $30 a head. And to make matters worse, land prices are expected to soften — which will make it harder for farmers to borrow if their collateral has depreciated.
The good news? Most farmers are coming off several good years so they may be prepared for a downturn. Let's hope so for their sake and for South Dakota's.
And we have enjoyed a booming farm economy.
It has often been said that they even spend a lot of money when they are not making so much — and we're about to test that theory because profits are going down on the farm according to last Friday's Wall Street Journal.
Journal writers quoted ag department experts who think that farm profits may fall 38% this year. Net farm income is expected to drop to $54 billion this year, down $33.2 billion from 2008 when high oil prices resulted in higher corn prices thanks to ethanol. That is a sobering $9 billion lower than the 10-year average.
Dairy, hog, wheat, soybean and corn farmers will be among the hardest hit if conditions continue as they are. Hog farmers are losing as much as $30 a head. And to make matters worse, land prices are expected to soften — which will make it harder for farmers to borrow if their collateral has depreciated.
The good news? Most farmers are coming off several good years so they may be prepared for a downturn. Let's hope so for their sake and for South Dakota's.




