A recent report on the economic impact on South Dakota by the agricultural industry illustrates why it is important to the state that a new farm bill is approved by Congress.
State Bureau of Finance and Management economist Jim Terwilliger told South Dakota Banking Commission members that farm income in South Dakota has "exploded" in the past two years and is a principal reason the state has weathered the recession better than other states.
Helped, in part, by the growth of the ethanol industry, farm income doubled from 2008 to 2011 to $4 billion. Last year's farm income slipped to $3.5 billion. Net farm income was 8.8 percent of the total personal income in South Dakota in 2012.
"Since 2008, things have pretty much just exploded in farm income," Terwilliger says. "Quite frankly, it's helped our state weather the recession we had better than almost any state in the nation."
Terwilliger says South Dakota's non farm employment is 2 percent higher than the pre-recession peak, while nationally employment is 1.1 percent below the peak.
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We were disappointed that the report to the Banking Commission downplayed the economic impact of the October blizzard. Livestock losses represent only 0.8 percent of the state's cattle inventory, and total losses were between $35 million and $40 million, according to Terwilliger.
Unfortunately, the livestock losses were concentrated in a relatively small area. The losses may not have made a significant impact on the state's overall cattle industry. Some West River ranchers lost half their herds and most ranchers suffered some damage.
Meanwhile, a new farm bill remains in a House-Senate conference committee. Rep. Kristi Noem, R-S.D., who is a conference member, says the farm bill won't be ready until January, although lawmakers have agreed to a preliminary agreement on the bill's framework.
Despite efforts to broaden South Dakota's economy, agriculture remains the state's No. 1 industry. All the more reason that Congress needs to pass a new farm bill as soon as possible.
Editor's note: This opinion appeared in the Rapid City (S.D.) Journal on Dec. 13.
