Ag Producers Balance Reinvesting And Saving
Farmers and ranchers in South Dakota must decide whether to save the money they make from crops and livestock or reinvest it. The growing season is well underway for South Dakota farmers, and ranchers are watching markets as they raise their animals.
Record commodity prices for corn and soybeans are gone, and that has some farmers keeping their money in the bank instead of spending it on upgrades and new equipment. South Dakota Secretary of Agriculture Lucas Lentsch says growers remain cautious.
“While you might be seeing a pullback in certain areas, you definitely see resurgence in others. The livestock sector, for example, right now is really seeing a robust reinvestment in not only our facilities and equipment on the farms and ranches, but also in the technology,” Lentsch says. “The bull prices this year, for example, are incredibly high and robust in the sense that there is good money in the beef sector right now. We’ve seen also our rangeland rental rates also follow the price of beef cattle just like we saw cropland rental rates increase with our commodity prices.”
The Ag Secretary says some of the decisions about when and where to spend money come from the latest generation of farmers. Lentsch says younger farmers are assessing the strengths of the family business. He says some are planning for the future by diversifying their farming and ranching operations.
“I think you’re going to see a return to chores. And what I mean by that is having a livestock industry here in the state where we do our chores at home and we have a consistent product like livestock on our farm or ranch that’s adding value to what we raise,” Lentsch says. “It’s no different than our farm and ranch family. We were thankful that we had cattle to background over the winter to add value to the commodity prices.”
Lentsch says farmers and ranchers know their work comes with inherent risk. He says community support is essential for the success of people who raise livestock and grow crops.