South Dakota farmers in 2015 saw a drop in income of more than $100,000 from 2014, according to a study by the South Dakota Center for Farm/Ranch Management at Mitchell Technical Institute.
The study calculated the average farm income in the state in 2015 was less than $39,000, The Daily Republic reported. That's compared with about $168,000 in 2014 and the five-year average of $163,000.
The drop in profit was mainly the result of lower grain prices and declining livestock values. Jared Hofer, director of the Farm Management Program at MTI, said livestock values probably dropped about 25 percent from the prior year.
"Most grain farming operations showed above-average yields in 2015, which created a slight profit, despite land and input costs continuing to rise while grain prices stayed low," he said.
Even though the numbers show a slight profit for farmers, the net income doesn't take into account family living expenses, which averaged about $83,335 in 2015.
The net income for 2015 was lower than every year since at least 2009, when a "farm boom" caused commodity prices to rise, Hofer said.
"There was a five- to six-year run there where it was very profitable to be a farmer, but unfortunately, reality has kind of set back in," he said. "The commodity prices, they're probably slightly higher than they were before the boom, but the expenses are significantly higher. There's just not much margin left for the farmer."
The study was based on data from 111 farms. The Center for Farm/Ranch Management has tracked farm profits for about a quarter century.
Hofer doesn't believe 2016 will be a better year for farmers because he expects a drier season, average yields and still-high operating expenses.
"Those factors are kind of concerning, that if we get back to an average production with these lousy prices, it's going to be ugly," he said. "Overall, just with prices and moisture, we need a few things to go our way to have an average year again."