Median farm income plunges in Minnesota

New study says profits remain thin for a fifth straight year.

Posted: Mar 27, 2018 3:19 PM

MINNEAPOLIS (AP) — Bumper crops and slightly better prices for some commodities weren't enough to save most Minnesota farmers from a fifth straight year of thin profits in 2017, according to a report released Tuesday.

The annual analysis from University of Minnesota Extension and the Minnesota State colleges and universities system found that nearly one-third of Minnesota farmers saw their net worth decrease in 2017. The state's median farm income was about $28,500, down from about $36,000 in 2016.

Dairy farmers faced some of the toughest challenges, Extension economist Dale Nordquist said. Milk prices tanked in the second half of the year, he said and a lot of farmers are now losing $2 on every hundred pounds of milk they produce. Pork producers were the one group that enjoyed higher profits thanks to somewhat better prices after losses the year before, he said. High-to-record yields have helped crop farmers "tread water" and withstand low prices, he said.

"It certainly wasn't the year we needed to turn things around," Nordquist said. "It was a tough year for crop producers and a little better for livestock producers. ... It wasn't really enough to make up the difference."

The report comes at a gloomy time for agriculture across the country. The U.S. Department of Agriculture forecasts that net farm income nationwide will fall 6.7 percent this year, to $59.5 billion, which would be the lowest level since 2006 and far below the record set in 2013 of over $120 billion. Low commodity prices have been the main reason. And the USDA predicts net farm income is likely to remain flat over the next 10 years, falling in real terms after inflation.

Minnesota's dairy farmers enjoyed relatively profitable prices in the first half of 2017 before the bottom fell out of the market and left them squeezed between low milk prices and higher feed costs, Nordquist said. Some are deciding to call it quits because of the financial stresses, he said. Many producers are older with fewer cows, he said. It's tough for farmers in that situation to decide whether to invest more money in aging facilities or do something else, he said.

The findings rang true for Tom Sedgeman, who has about 380 cows on his farm near Sauk Centre. He said he's more concerned about the impact of the downturn on younger farmers than himself.

"In my case, I'm 62. We're able to withstand a few more things than the younger generation," he said.

Sedgeman is particularly concerned for his son-in-law, a fellow farmer who wonders whether there will be opportunities for his young children to farm.

"In today's world it's extremely difficult to start from scratch, the capital investment is just so huge," he said.

While Minnesota corn and soybean farmers harvested a "tremendous crop," Nordquist said, so did farmers across the Corn Belt, keeping prices low. Fortunately, he said, there's been a "little bit of a run-up" in world prices for soybeans and corn in the last few weeks, mostly because of the drought in Argentina, so some producers have taken advantage to get better prices for their 2017 crops and lock in those prices for 2018.

Although Minnesota's crop farmers have struggled with low profits for the past five years, Nordquist said it's not a crisis for most. Balance sheets for most remain "pretty strong" because their strong yields have given them more bushels to sell, he said.

The study looked at data from over 2,100 participants in Minnesota State's farm business management programs and over 100 members of the Southwest Minnesota Farm Business Management Association. The participants represent about 10 percent of the state's commercial farmers.

Minnesota Coronavirus Cases

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Confirmed Cases: 39133

Reported Deaths: 1514
CountyConfirmedDeaths
Hennepin12597787
Ramsey4963229
Dakota242192
Stearns241419
Anoka2266109
Nobles16726
Olmsted114715
Washington113740
Mower9602
Rice8488
Scott7624
Clay59138
Kandiyohi5781
Blue Earth4942
Wright4835
Todd4012
Carver3951
Lyon3272
Sherburne3255
Freeborn2970
Watonwan2380
Steele2371
Benton2203
St. Louis19615
Nicollet17312
Martin1715
Cottonwood1360
Goodhue1318
Winona12915
Crow Wing10812
Le Sueur1081
Pine1070
Chisago1021
Otter Tail1001
McLeod920
Dodge880
Carlton870
Unassigned8537
Polk822
Chippewa791
Isanti750
Waseca710
Douglas650
Murray650
Itasca6412
Meeker611
Morrison611
Faribault600
Pipestone592
Becker570
Jackson550
Sibley542
Pennington520
Renville362
Beltrami340
Brown342
Mille Lacs342
Wabasha330
Rock310
Fillmore300
Yellow Medicine300
Houston270
Swift221
Wilkin213
Norman200
Redwood190
Koochiching181
Grant170
Roseau170
Cass162
Aitkin150
Big Stone150
Kanabec151
Wadena150
Marshall120
Pope120
Lincoln100
Mahnomen101
Clearwater90
Hubbard80
Lake60
Stevens50
Traverse50
Lac qui Parle40
Red Lake40
Kittson20
Cook10
Lake of the Woods00

Iowa Coronavirus Cases

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Confirmed Cases: 32064

Reported Deaths: 731
CountyConfirmedDeaths
Polk6739181
Woodbury326044
Black Hawk232358
Buena Vista171911
Johnson13408
Linn130482
Dallas129129
Marshall106019
Scott84510
Story8063
Pottawattamie74512
Dubuque74222
Wapello70830
Crawford6783
Muscatine64944
Sioux4810
Tama46829
Wright3851
Louisa36313
Jasper32517
Plymouth3245
Warren2911
Dickinson2663
Webster2484
Washington2459
Cerro Gordo1901
Hamilton1891
Boone1501
Clay1370
Allamakee1334
Clarke1333
Mahaska11717
Shelby1170
Clinton1131
Poweshiek1078
Carroll991
Pocahontas981
Bremer957
Franklin950
Des Moines912
Emmet870
Henry863
Cedar851
Hardin810
Taylor800
Monona770
Cherokee761
Floyd732
Marion710
Benton681
Guthrie684
Jones640
Sac640
Jefferson620
Osceola620
Buchanan601
Butler592
Hancock551
Humboldt551
Calhoun542
Harrison540
Lee542
Iowa530
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Monroe517
Fayette500
Madison482
Lyon450
Clayton443
Davis411
Mitchell410
Palo Alto410
Grundy400
Mills390
Winneshiek390
Kossuth360
Howard340
Jackson340
Union340
Lucas314
Chickasaw290
Greene290
Winnebago290
Cass240
Ida230
Appanoose213
Keokuk211
Van Buren210
Page200
Worth200
Adair160
Audubon161
Unassigned160
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