"At current prices, many producers will lose money on cash-rented land in the coming year," Ron Dvergsten, coordinator of the farm business management program at Northland Community & Technical College in Thief River Falls, said in the report.
While rents and other costs are projected to increase in 2014, he said, one plus is that fertilizer prices are down.
Even with strong prices for meat and milk, Nordquist said, livestock producers struggled through most of last year because of high feed and forage costs that didn't come down until the harvest.
"But now coming into 2014, it looks like a really strong year for livestock producers," Nordquist said.
Prices for meat and dairy products keep rising. In fact, he said, livestock farmers are starting to worry that consumers will start shying away because of the high prices they're now seeing in grocery stores. Government figures show beef prices jumped 4 percent in February alone because of the western drought, the most in more than 10 years, while milk and other dairy prices also rose.
One wild card for Minnesota's pork producers is the porcine epidemic diarrhea virus, he said. It's deadly to newborn piglets so it can be a disaster for farms stricken by it. The virus showed up in the U.S. last spring and has been spreading rapidly in several states including Minnesota.
The study used data from 2,063 participants in MnSCU farm business management education programs, 111 members of the Southwest Minnesota Farm Business Management Association and 41 participants who worked with private consultants.
Annual report: http://blog.lib.umn.edu/umnext/news/2014/03/minnesota-farm-incomes-drop-dramatically-in-2013.php
FINBIN Farm Financial Database: http://www.finbin.umn.edu