South Dakota's agricultural outlook is less rosy than crop yields suggest. During a Thursday virtual briefing, members of the Governor's Council of Economic Advisers described a growing squeeze on farmers as surplus production and weakening foreign demand undermine crop prices.

Karl Adam, president of the South Dakota Bankers Association, shared a stark reality: while growers are enjoying abundant harvests, many are still looking at losses of $125 to $200 per acre for corn-down from the more than $7-per-bushel prices of past years, now languishing below $4. This slide is expected to contract balance sheets statewide.

Economist Evert Van der Sluis of South Dakota State University linked this growing pinch to the state's modest GDP outlook. He cited the latest S&P Global forecast projecting just 0.4% growth for South Dakota in 2025-trailing the 1.7% national average-and flagged mounting labor shortages, particularly in agriculture and construction. These pressures are compounded by tightening federal immigration policies and rising deportations.

Trade policy also looms large. Van der Sluis noted that tariffs implemented during the Trump administration continue to cloud U.S. competitiveness abroad. A significant illustration: while nearly half of U.S. soybeans once headed to China, that market has since pivoted toward Brazil, where agricultural expansion and infrastructure investments are paying off. "China's still eating and buying. They're just not buying from us," said John Hemmingstad, a director at Avalon Capital Group.

Supporting the trade data, an Investigate Midwest report-drawing from the Census Bureau's USA Trade Online-shows a 39% drop in U.S. agricultural exports to China between June 2024 and June 2025.

Despite mounting price pressures, farmland values in the state remain sturdy, bolstered by expectations of government intervening with financial aid. Yet, Hemmingstad cautions that "there's no guarantee we'll get that same safety net," especially as tariffs continue to dampen multiple sectors.

Policymakers and agribusinesses are now watching closely for signals in the next Farm Bill, commodity price supports, crop insurance updates, or precision agriculture incentives that could buffer producers or entice sustainable agriculture investments. With input costs rising and the supply chain still fragile, it's a delicate balancing act to steer South Dakota's agriculture through this turbulent stretch.