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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

Data is updated nightly.

Cases: 584227

Reported Deaths: 7297
CountyCasesDeaths
Hennepin1211481718
Ramsey50494868
Dakota45177443
Anoka40908433
Washington26429279
Stearns21950221
St. Louis17568302
Scott17036124
Wright15771136
Olmsted1312197
Sherburne1144384
Carver1035045
Clay809292
Rice7964106
Blue Earth740941
Crow Wing654188
Kandiyohi648282
Chisago584051
Otter Tail568978
Benton561497
Goodhue471972
Mower461432
Douglas460474
Winona448950
Itasca421153
McLeod417758
Morrison414560
Isanti410762
Nobles406748
Beltrami388558
Steele382015
Polk380368
Becker376450
Lyon357850
Carlton340953
Freeborn339929
Pine324121
Nicollet321443
Brown303540
Mille Lacs298252
Le Sueur286422
Todd278731
Cass266328
Meeker251340
Waseca235822
Martin228831
Roseau206119
Wabasha20383
Hubbard184241
Dodge18193
Renville178243
Redwood171536
Houston170215
Cottonwood163121
Fillmore154110
Wadena153621
Pennington153319
Chippewa151338
Faribault150319
Kanabec143024
Sibley141310
Aitkin133236
Watonwan13049
Rock127319
Jackson121411
Pipestone114226
Yellow Medicine113620
Pope10846
Murray10579
Swift104218
Stevens89211
Marshall87617
Clearwater85816
Koochiching81615
Lake80619
Wilkin79912
Lac qui Parle75022
Big Stone5934
Lincoln5733
Grant5648
Mahnomen5418
Norman5379
Unassigned49793
Kittson48222
Red Lake3957
Traverse3685
Lake of the Woods3193
Cook1560

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 364967

Reported Deaths: 5920
CountyCasesDeaths
Polk57277621
Linn20729334
Scott19808240
Black Hawk15757308
Woodbury15091228
Johnson1441183
Dubuque13326209
Dallas1111198
Pottawattamie11043168
Story1054948
Warren573688
Clinton552092
Cerro Gordo536389
Sioux512874
Webster510993
Marshall481075
Muscatine474699
Des Moines451766
Wapello4284122
Buena Vista424040
Jasper413771
Plymouth400179
Lee373155
Marion360575
Jones296957
Henry290737
Carroll284752
Bremer282860
Crawford265840
Boone262734
Benton255055
Washington253350
Dickinson247543
Mahaska229351
Jackson220942
Kossuth215164
Clay214725
Tama208971
Delaware208240
Winneshiek196733
Page192222
Buchanan190431
Cedar188923
Fayette184741
Hardin184643
Wright183436
Hamilton179249
Harrison179273
Clayton169156
Butler164234
Mills161422
Madison160419
Floyd159642
Cherokee158538
Lyon157541
Poweshiek154733
Allamakee150351
Iowa148124
Hancock146834
Winnebago141231
Cass137554
Calhoun136613
Grundy136033
Emmet133940
Jefferson132135
Shelby130437
Sac130119
Appanoose128048
Louisa127849
Union127832
Mitchell125742
Chickasaw123815
Guthrie120829
Humboldt118826
Franklin117421
Palo Alto112223
Howard104122
Montgomery102838
Unassigned10080
Clarke99824
Keokuk95331
Monroe95129
Ida90234
Adair86232
Pocahontas85422
Monona82730
Davis81824
Osceola77916
Greene77610
Lucas76823
Worth7368
Taylor65612
Fremont6229
Decatur6069
Van Buren55718
Ringgold55524
Wayne53223
Audubon50610
Adams3384
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