Farm Business Management

Large Farms More Dominant in South Dakota Crop Production

Large farms play a more dominant role in South Dakota crop production, according to the recently released 2017 U.S. Census of Agriculture. As of 2017, large farms of more than 2,000 acres operate 66.8% of South Dakota total cropland aces compared to 47.7% as of 1997.

Grain Merchant and Processor Consolidation, Concentration, and Competition

A general trend in the last century has been for greater consolidation among Grain Merchants and Oilseed Millers and Processors. The U.S. Census Bureau tracks the number of firms and/or establishments and value of sales (market size) by industry sector every 5 years as a part of the Economic Census. In addition to the number of firms and sales, the Census Bureau publishes concentration ratios for each sector. One concentration ratio they publish is the amount of sales attributed to the four largest firms in that sector. The percentage of sales of the 4 largest firms is a measure that aids in identifying the type of market structure that exists.

Farm Size and Efficiency

Growth is a common denominator of various business objectives. A business may want to grow profits, sales, market share, etc. The growth of a business itself usually refers to growth in equity, or growth in assets after debts have been paid. Farms, from a business perspective, are no exception. Farmers seeking to grow equity need to be willing and able to retain earnings and cannot be overleveraged.

Choosing an Advisory Board

A board of directors is a vital part of the governance and constitution of many corporations. A board of directors is formally involved in the business and is legal responsible for the overall governance of the corporation.