Report shows farm income rose in 2010, livestock comes back
ST. PAUL -- A new report on farm income shows that median farm income for crop farmers more than doubled and livestock farmers moved their income back into the black in 2010.
The annual farm income report, by the Minnesota State Colleges and Universities and the University of Minnesota, was released Thursday.
According to a news release, median net farm income overall was $119,915 among about 2,500 Minnesota farms in 2010, up from $33,417 in 2009, when net farm incomes were depressed by low profits in the livestock sector and increased production costs, the analysis shows.
"Most Minnesota producers had a good year in 2010," said Richard Joerger, system director for agriculture and business at the MnSCU system. "However, these results occurred in an extremely risky and volatile environment."
"The biggest change in 2010 was the return to profitability of hog farms, which tend to be larger in gross sales than other Minnesota farms," said Dale Nordquist, Extension economist with the University of Minnesota's Center for Farm Financial Management. In 2010, hog farms earned median profits of more than $250,000 compared to losses of $73,000 in 2009.
The report analyzed results from 2,362 participants in the MnSCU farm business management education programs and 97 members of the Southwest Minnesota Farm Business Management Association. Net farm income is used for living expenses, income taxes, retirement and business reinvestment.
For crop farms, the median net farm income increased to $161,441 in 2010, up from $60,128 in 2009, Nordquist said. Increased profitability was driven largely by the run-up in crop prices at year-end. Prices received on sales were actually down.
"Most of the increase in crop farm earnings was reflected in increased values in inventory on producers' balance sheets at the end of the year. Producers have to sell those crops at profitable prices to realize these profits, but they certainly have had that opportunity," Nordquist said.
"Dairy producers made some comeback in profitability. Yet many still produced milk at break-even prices or at a loss," Nordquist said. The median dairy farm made a net farm income of $57,853 in 2010 compared to just over $2,000 in 2009.
"Agriculture is one bright spot for the Minnesota economy," Joerger noted. "The farms that participate in our farm business management education programs contribute $1.4 billion to rural Minnesota's economy."
Details of the annual report are available at www.finbin.umn.edu through the University of Minnesota's Center for Farm Financial Management.