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.