SOUTH DAKOTA STRAIGHT TALK

The agricultural economy is booming in South Dakota.

Corn production in South Dakota is likely to set an all time record and because of demand for Ethanol, prices are at high levels. This very important fact about our Ag Economy has been miserably and regrettably under reported. .

To put this Good News into perspective consider the following from the November 2007 Economic Update from the South Dakota Bureau of Finance and Management.

The agricultural economy

South Dakota’s October 1 st corn production for 2007 is forecast at 569.6 million bushels, up 82% from last year’s level and is a potential record high production for South Dakota. Yield, forecast at 128 bushels per acre, is up 31 bushels from last year’s yield.

South Dakota’s October 1 st soybean production for 2007 is forecast at 129.15 million bushels down 1% from last year’s production. The estimated yield of 41 bushels per acre is a potential record high yield for South Dakota.

The July-September quarterly milk production for South Dakota totaled 410 million pounds, 8% above last year’s 380 million pounds.

On October 1 st , South Dakota’s 1,000+ capacity feedlots reported 180,000 cattle on feed for the slaughter market. This was up 10,000 head from last year and up 5,000 from a month earlier.

Commercial red meat production for South Dakota totaled 86.0 million pounds during September. This was up 11% from one year ago and but down 8% from last month.

All crop prices and livestock prices are higher than a year ago, except for hogs. Continued high demand for crops has put upward pressure on crops over the past several months as crop prices are substantially higher than a year ago.

As of October 21st, 11% of topsoil was rated short to very short. Subsoil moisture conditions were rated 24% short to very short.

South Dakota farm real estate value, including land and buildings, averaged $820/acre on January 1, 2007, up 15% from 2006. This is an increase of $110 over the 2006 value of $710/acre. This is the highest farm value on record, as values have increased over 90% in the last five years.

Straight Talk resumes - Current developments in Washington make South Dakota’s Agricultural Industries’ future appear very bright.

The Energy Bill that passed the Senate this past week and now going to Conference Committee contains a doubling of the mandate for Ethanol. The Conference bill is expected to pass Congress and be signed into Law by the President. The Law assures at least in the short term a market for corn based Ethanol and customers for our Ethanol plants. These mandates are good energy policy, in that even in a small way makes America more energy independent and less dependent on foreign oil, especially Middle Eastern oil. Consumers however have to pickup the tab for the mandate (subsidy).

The Farm Bill renewal also passed the Senate this week but its future is unclear. The major hang-up seems to be the level of farm subsidy any producer could receive. Both Senators Thune and Johnson support an annual $250,000 cap, though this could not be incorporated into the Bill. President Bush has indicated without a cap lower than the present one, he will veto the bill. The current bill also includes important features for disaster assistance and important research into cellulosic Ethanol. It will be interesting to see the fate of this important legislation as Congress concludes its business during the coming week.

Despite relative good times lately in Farm and Ranch country, the Federal Government still seems ready to provide substantial aid and subsidies to the American Farmer.