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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: 276500

Reported Deaths: 3321
CountyCasesDeaths
Hennepin590031089
Ramsey24988472
Anoka19724213
Dakota19215176
Washington12538106
Stearns1226689
Scott753854
St. Louis740897
Wright663436
Olmsted610130
Sherburne512539
Clay445155
Carver409712
Blue Earth373511
Rice361431
Kandiyohi348215
Crow Wing316130
Nobles296028
Chisago28398
Otter Tail266615
Benton261940
Winona246128
Mower236722
Polk228621
Douglas219829
Morrison211621
Lyon193711
McLeod18879
Beltrami184615
Goodhue177626
Becker17559
Itasca168924
Steele16756
Todd165312
Isanti165015
Carlton153610
Nicollet146523
Freeborn13935
Mille Lacs132830
Le Sueur13219
Waseca129710
Cass12018
Pine11926
Brown117510
Meeker10797
Roseau9923
Martin98220
Hubbard97022
Wabasha9121
Dodge7850
Redwood78018
Watonwan7754
Chippewa7697
Sibley7094
Renville70818
Cottonwood7060
Wadena7006
Aitkin68923
Pipestone67018
Rock6439
Houston6152
Fillmore6050
Yellow Medicine56611
Pennington5356
Kanabec52911
Murray5283
Swift4976
Pope4820
Faribault4750
Stevens4442
Clearwater4356
Marshall4277
Jackson4091
Lake3584
Unassigned34356
Koochiching3325
Wilkin3275
Lac qui Parle3203
Lincoln3141
Norman3096
Big Stone2771
Mahnomen2494
Grant2346
Red Lake1903
Kittson1856
Traverse1330
Lake of the Woods871
Cook580

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 213603

Reported Deaths: 2193
CountyCasesDeaths
Polk31707324
Linn13442161
Scott1040375
Black Hawk10393127
Woodbury9932114
Johnson911635
Dubuque879290
Story647619
Dallas602856
Pottawattamie585166
Sioux351925
Webster335930
Marshall332942
Cerro Gordo326541
Clinton307737
Buena Vista291114
Muscatine270366
Des Moines270116
Plymouth259537
Warren258510
Wapello242871
Jones222212
Jasper206639
Marion194418
Carroll190920
Lee190315
Bremer182612
Henry17087
Crawford170615
Benton160315
Tama146340
Jackson13758
Delaware136221
Washington131313
Boone128811
Dickinson127510
Mahaska121327
Wright11625
Buchanan11009
Page10834
Hardin107510
Clay10624
Clayton10234
Harrison102328
Hamilton10157
Cedar101413
Calhoun10047
Mills9886
Fayette9768
Floyd96914
Lyon9668
Kossuth9464
Poweshiek93712
Butler9134
Winneshiek90310
Iowa88011
Winnebago87523
Louisa81316
Hancock8067
Grundy79710
Chickasaw7893
Sac7817
Cherokee7624
Cass75419
Appanoose7426
Shelby7265
Allamakee72411
Mitchell7184
Union7096
Guthrie70815
Emmet70623
Franklin68419
Humboldt6645
Madison6474
Jefferson6351
Palo Alto6064
Unassigned5950
Keokuk5397
Pocahontas5192
Howard5069
Greene4980
Osceola4941
Clarke4614
Davis4405
Ida43910
Montgomery43210
Taylor4312
Monroe42912
Adair4157
Monona3932
Fremont3463
Van Buren3364
Worth3360
Lucas3076
Decatur3000
Wayne2876
Audubon2831
Ringgold1892
Adams1551
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