MINNEAPOLIS (AP) — Lower corn prices fueled a dramatic 78 percent drop in Minnesota farm income last year, according to an annual report released Thursday by the Minnesota State Colleges and Universities system and University of Minnesota Extension.
Net farm income was $41,899 for the median farm in the study, compared with $189,679 in 2012. Livestock farms did not fare much better, as incomes for dairy, hog and beef operations also declined in 2013.
While the authors said they expect another down year for crop farmers in 2014, they expect a much better year for livestock producers who are already catching a break from lower feed costs and higher meat prices.
Extension economist Dale Nordquist said the big question is how long the lower profits for crops will last.
The huge drop in overall farm income was not a surprise, he said, given that 2012 was an unusually profitable year for Minnesota crop farmers, who largely escaped a widespread drought and benefited from the resulting high prices. Most farmers still had enough cash on hand so they didn't feel the full impact in 2013, but it'll hit harder this year when they sell off the rest of last year's crops, he said.
"It's not pretty," Nordquist said. "For a lot of farmers it's certainly not a crisis. They did come in with great working capital. It's just a matter of this year they're going to have to use up some of that working capital to make up for losses in production."
Minnesota's net return per acre of corn fell from a $377 profit in 2012 to a loss of $24 in 2013, the report said. Soybeans returned a profit of $85 per acre compared with $216 in 2012. And sugar beet producers lost an average of $300 per acre as the price dropped from $65 a ton to $35.
Other factors putting the squeeze on profits included rising land rents and other production costs, Nordquist said, as well as and a cold, wet spring followed by drought that led to below-average yields.