Information released in annual U of M Extension/MnSCU report
Many people in the Cross-Counties Connect area already knew this – but a recently released annual report, compiled by the University of Minnesota (U of M) Extension and Minnesota State Colleges and Universities (MnSCU), confirmed that knowledge. That knowledge which was corroborated in the report (as posted in the link above) is that the income of Minnesota farmers dropped quite dramatically in 2013 – as compared to 2012. Minnesota farm income fell 78% last year, which is as low it has been since 2009. For a median-size farm, the net farm income was $41,899, down from 2012’s level of $189,679.
A number of factors were said in the report to have contributed to the decline.
The first was a cold, wet spring 2013, which meant planting was delayed – which led to lower production.
A second factor was an increase in farmer expenses, especially land rents.
A significant drop in commodity prices was the third factor. This decline did not help Minnesota farmers’ incomes. The report notes that the net return per acre for corn dropped from 2012’s mark of $377 to a loss last year of $24 per acre. The net return per acre for soybeans also went on a downhill run, heading down from $216 in 2012 to $85 in 2013.
It is detailed in the report that margins for crop producers will be tighter, but that at least farmers will be heading into the growing season with a strong working capital position. In addition, fertilizer prices are expected to be lower, which will be a savings. However, land rent prices continue their upward climb.
Just as crop producers had a difficult 2013, so, too, did livestock producers. Dairy farmers, hog farmers and beef producers all had falling incomes. For dairy farmers, that drop was 58%, while hog farm incomes declined 38% and beef producers saw a whopping 94% income slide. Things could be looking brighter for livestock farmers, however, because high feed costs (which were a boon to crop producers) will be coming down.
Data for the report was drawn from over 2,000 participants in MnSCU farm business management education programs, 111 members of the Southwest Minnesota Farm Business Management Association, as well as 41 participants who worked with private consultants.