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South Dakota’s Agricultural Landscape: Challenges and Prospects
By Joshua Haiar
Current Situation in South Dakota
Farmers in South Dakota are witnessing a paradox this season. While crops are flourishing, prices are not. An increase in supply coupled with dwindling foreign demand has led to a drop in prices. This was discussed during a recent virtual gathering by the state’s economic advisers.
Financial Strain on Farmers
Karl Adam, the president of the South Dakota Bankers Association and a member of the Governor’s Council of Economic Advisors, highlighted the issue. Farmers are facing potential losses of $125 to $200 per acre for corn. The price per bushel, which once soared above $7, has now plummeted to less than $4, according to historical data.
“On the ag side, I think we’ll see a lot of balance sheets contract,” said Adam, hinting at the underlying financial pressures.
Global Trade Dynamics and Their Impact
John Hemmingstad, a director at Avalon Capital Group, pointed out a significant concern. Traditionally, around half of all U.S. soybeans were destined for China. However, China has begun sourcing more from Brazil, transforming its agricultural infrastructure rapidly. As Hemmingstad observed, “China’s still eating and buying. They’re just not buying from us.”
Furthermore, U.S. agricultural exports to China decreased by 39% from June 2024 to June 2025, according to an Investigate Midwest report.
Economic Forecast and Potential for Recovery
Evert Van der Sluis, an economics professor at South Dakota State University, provided a broader economic perspective. The state’s GDP growth forecast for 2025 is 0.4%, alarmingly low compared to the national average of 1.7%. This is primarily attributed to diminished crop profitability.
Van der Sluis also warned about exacerbating labor shortages in agriculture. Federal immigration policies have tightened, and deportations are on the rise, adding another layer of complexity.
The Role of Tariffs
Tariffs, explained Van der Sluis, are taxes levied on imported goods, and the cost is often passed to domestic consumers. The tariffs and international policies of the Trump era, according to Van der Sluis, have negatively affected the U.S.’s global standing.
The Silver Lining: Farmland Values
Despite the downturn in crop prices, farmland values remain robust. Investor confidence is buoyed by the hope of legislative support. However, as Hemmingstad cautiously noted, “there’s no guarantee we’ll get that same safety net.”
Conclusion
In summary, while the immediate outlook presents challenges, there remains a glimmer of hope. The enduring value of farmland suggests a potential turnaround, provided the right measures are taken.
South Dakota Searchlight launched in 2022 and is associated with States Newsroom, America’s largest state-focused nonprofit news organization, supported by grants and donations. The editorial team enjoys full independence.
