South Dakota pumps 90,000 dairy cattle, down from 150,000 in the 1980s. Those cows are milked by around 400 dairy operators, down from 1200 during the 1980s.
According to state Ag Department dairy development specialist David Skaggs, 23 of those operators are foreign transplants lured here by the state with promises of low regulation, immigration assistance, and other government favors. Those 23 foreign transplants control 20,350 head of dairy cattle.
In other words, our state-favored foreign recruits make up 6% of operators but control 23% of the herd.
Not included in the numbers provided by the state Ag Department is the percentage of jobs in all of our big dairies, foreign and domestic, that are held by non-resident workers who send a large chunk of their wages out of state.
Skaggs tells David Rookhuyzen of the Pierre Capital Journal that the main reason foreign dairy operators buy our sales pitch is that "there is so much available land" [Rookhyzen's words] compared to Europe.
Please pardon the young farmer next to you as he spits his coffee at the newspaper. "Available" is obviously a relative term; even Senator John Thune recognizes that our high land prices (which are driven higher by recruiting big foreign operators) price young South Dakotans who want to get into farming out of the business:
Speaking to about 150 people at an Aberdeen Area Chamber of Commerce Ag Committee luncheon at the Ramkota Convention Center, 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 [Scott Waltman, "Thune: High Land Prices Might Deter Would-Be Farmers in South Dakota," Aberdeen American News, 2013.01.11].
Money talks, young South Dakota farmers walk... right out of an industry dominated by state-favored big operators.
Low interest rates make farmland a desirable investment. With land prices going up 20+% every year, it gives a better rate of return than any CD at the bank. Extend out that rate of growth a few years and $13,000 an acre will seem like a bargain.
When will politicians learn that a good business decision should be based on efficient productivity and available resourses.
Good business decisions in proper capitalism is not based on taxes or artificially low interest rates. A politician sees artificially low interest rates as a way to temporarily boost the economy to get reelected. They do not see that it skews long term investment to do other than what is efficient and therefore is messing up the long term economy. But now they have been doing it so long that they can not see their way out of this mess.
When the politicians stop playing their games, it will take a while but we will be able to see what normal is again.
But as long as they creat so called 'fiscal cliffs' to rescue us from, we will never get to normal again.
Michael, that's not a bad financial analysis, but how many beginning farmers can afford that price of admission? At $13K, aren't we easily talking about more than a million dollars to get a typical farm of reasonable size? Is it realistic to think a bank is going to spot that kind of capital for any young farmer?
Also, doesn't your financial advice require that I plan to sell the land someday to see the return on my investment? Am I going to see enough return on my yearly farming operation to make the investment worth it, or do I have to enter the business under the assumption that I am going to give it up and sell out someday?
small town farmer in Colorado. tough times. no bailout.
http://www.thedenverchannel.com/news/state-news/farmer-kills-12000-chickens-before-going-bankrupt_32090073
US nutrition professionals beholden to Big Food:
http://ecowatch.org/2013/nutritionists-pocket-of-big-food/
Rhoden: "You have under this bill every right to do whatever you want." You don't have the right to control that land for eternity. RT @cody_winchester