Minnesota farm incomes rise slightly
ST. PAUL (AP) — Minnesota farm incomes marginally improved in 2016, but more than 30 percent of the state’s farmers were in the red last year amid the third straight year of declining commodity prices, according to a report released Tuesday.
The state’s crop producers managed to tread water financially, thanks to record yields. Livestock producers generally fared worse as milk, pork and beef prices hit new lows.
Those were some of the key findings in the annual report from University of Minnesota Extension and the Minnesota State Colleges and Universities system.
Across all types of Minnesota farms, median net farm income was $35,636, up from $27,478 in 2015, but down dramatically since the good years of 2007-2012. The median crop farm earned $46,348, compared with $27,462 in 2015. The average corn yield for these farms topped 200 bushels per acre for the first time, but the bumper crop pushed corn prices down 9 percent.
The story was similar for soybeans, wheat and most other crops.
“Those extra bushels in the bin saved many of our farms from near disaster,” Ron Dvergsten, a farm management instructor at Northland Community and Technical College, said in a statement. “But we still have a lot of farms that are on the edge going into next year, and some are having trouble getting operating credit for 2017 right now.”
Lower crop prices meant cheaper livestock feed but that wasn’t enough to make up for a second straight year of declining meat and dairy prices.
“Livestock producers earned record profits in 2014; that jump-started investment and expansion. Now we are seeing the downside of surplus production,” Dale Nordquist, Extension economist and co-director of the university’s Center for Farm Financial Management, said in a statement.
The report said some farms need to make major adjustments for 2017. Many have already restructured debt. But there are some grounds for optimism, including lower land rental rates, lower fertilizer and fuel prices, and recent increases in milk and pork prices, though beef prices are expected to remain depressed.