WOONSOCKET, S.D. - For the fifth year in a row, farm income has dwindled, and one local farmer doesn't know where else he can cut expenses.
"I don't know because after this year, about everything that's been cut has been cut down," said Henry Linke, of Woonsocket.
Linke farms about 800 acres of corn and soybeans and said his revenues dropped more than his expenses last year "by far."
"I made some money, but it wasn't a whole very much," Linke said.
He's not alone. According to the South Dakota Center for Farm/Ranch Management (SDCFRM) at Mitchell Technical Institute, the average farm enrolled in the program showed decreases in both expenses and revenues of approximately $100,000, leading to a slight decrease in net cash farm income.
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The SDCFRM is a program that provides guidance to 99 farms across the state, which then report data to provide a snapshot of agricultural activities in South Dakota for the past year.
Kathy Meland, an instructor for the SDCFRM program, said low commodity prices are to blame for the lost revenue, and that means there is less money being spent in local communities.
"It's no lie that when ag does well, communities all across South Dakota do well, and when ag is down, there's just that ripple effect," Meland said.
In a written report, Meland said livestock production ranks as the top source of both revenue and expenses for SDCFRM producers.
"It should be noted that this activity is a real economic engine for the area as most of the feed is produced and processed in South Dakota," Meland said.
With less money to spend, farmers have cut back on personal expenses. Family living expenses averaged $57,169 last year, $9,000 lower than the year before, according to the report.
But a loss in revenue also impacts individuals off the farm, like those in the machinery business. In 2016, the average producer in the program spent $97,000 in capital purchases, which includes land, buildings, equipment and breeding livestock.
While nearly $100,000 in equipment purchases may raise eyebrows, Meland said producers spent $118,000 one year earlier and $224,000 back in 2012.
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The average farm spent $47,000 in repairing equipment last year and $37,000 to pay for employees, which also marked slight downturns from one year before. Meland isn't sure how much more those areas can be cut.
"If you hire someone to feed your cattle every morning, the cattle still have to be fed," Meland said. "There's certain areas it's just hard to shave the expense."
Linke doesn't have any hired help, instead relying on assistance from his sons. Still, he knows he there are some pieces of his business that can't be cut, like seeds and fertilizer.
"In my opinion, you have to keep up with the technology and use the best that you can out there," Linke said.
Still, there is reason to hope. Linke said his land rent has fallen slightly, and crop prices have taken a small upturn in recent days. While he doesn't know what to expect from this growing season, he expects to still be in business come planting time next year.
"You do your best and, I don't know, your faith carries you through," Linke said. "If farming was easy, everybody would do it."
