Inflation-Adjusted Minnesota Farm Incomes Hit 20-Year Low

April 1, 2016 09:30 AM
 
Inflation-Adjusted Minnesota Farm Incomes Hit 20-Year Low

Inflation-adjusted farm incomes in Minnesota fell to their lowest point in 20 years in 2015 despite record crop yields and this year's outlook is also grim, according to an annual analysis released Thursday.

A major factor was the continued decline in commodity prices, the report from the Minnesota State Colleges and Universities system and University of Minnesota Extension said. Unlike 2014, when livestock producers had a very good year, both crop and livestock farms struggled last year.

Overall, the median net farm income in Minnesota last year was about $27,000, which was 37 percent lower than in 2014. The median livestock producer earned just under $24,000 in 2015, which was down from about $110,000 a year earlier. The median income for crop farms was just over $26,500, which was up from $16,500 in 2014 but down significantly from 2012, when income was about $260,000.

"Thank goodness for record yields," Dale Nordquist, University of Minnesota Extension economist, said in a statement. "At current prices, the average crop producer would have suffered a net income loss of over $50,000 with normal yields."

While commodity prices will remain weak in 2016, fuel and fertilizer costs are down. And cash rents, the major expense for most crop producers, fell 5 percent last year and are expected to continue to decline.

In a separate report Thursday, the U.S. Department of Agriculture said Minnesota farmers plan to plant more corn and less soybeans this year. The Prospective Plantings report said Minnesota farmers plan to plant 8.2 million acres of corn, compared with 8.1 million acres in 2015. They also plan to plant 7.4 million acres of soybeans, down from 7.6 million acres last year.

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Comments

 
Spell Check

Jeff
Hardwick, MN
4/1/2016 01:45 PM
 

  The cost of production is so high there is no money left to pay the land owner any rent. Basis here is NEGATIVE $0.75 a bushel for soybeans! That's more then a $1.13 a bushel less then New Orleans Port. Rationing grocery store prices are slowing down food sales. Where are the laws to prevent this?

 
 
Zorcon
Western, NE
4/4/2016 09:25 AM
 

  A negative basis where I farm is normal. But, the wider that basis, the weaker the demand for the commodity--or your local elevator is trying to cover their own losses. The exporters are probably our biggest problem right now. They're trying to cover their inventory with a basis over current futures prices. Between that and freight rates, the US loses out on many export sales. There is a North Carolina company IMPORTING wheat and soymeal from Argentina--adding to the US's burdensome supplies. Right now, I'm getting mid-90's prices and paying 2016's expenses. Doesn't compute does it? There will be nasty liquidations at the end of either this year or next. And people still don't believe we're revisiting the 80's?

 
 

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