Lower corn prices dropped Minnesota farm income in 2013

By Tom Webb
St. Paul Pioneer Press
ST. PAUL - Minnesota’s farm income plunged in 2013 after breaking records the year before, due partly to much lower corn prices, a report out Thursday said.
Net income last year was $41,899 for the median Minnesota farm studied, according to a report jointly issued by the University of Minnesota Extension and the Minnesota State College and Universities system.
That’s a 78 percent drop from the previous year, when Minnesota farm incomes shattered all records, with a median of nearly $190,000 among the 2,063 crop and livestock operations studied.
Officials tried not to sound too dire, given that many Minnesota crop farmers are coming off a run of very strong years.
“We have to remember where we came from,” said Dale Nordquist, extension economist in the University of Minnesota’s Center for Farm Financial Management. “2012 was a very profitable year for Minnesota farms. … Most crop producers were in pretty good shape to handle a down year.”
Many factors contributed to the decline, officials said. Statewide yields were down for major crops such as corn and soybeans, in part because of a cold and wet spring that delayed planting. Expenses were up, especially land rents.
But most dramatically, the price of major crops was down significantly, especially later in the year, and particularly for Minnesota’s No. 1 crop, corn. In 2012, crop prices soared due to a severe drought that hammered nearly every part of the Corn Belt, except Minnesota.
Minnesota officials said the net return for an acre of corn fell from $377 in 2012 to a negative $24 in 2013. There were steep declines as well in soybean returns - from $216 to $85 an acre - and in sugar beets, where producers lost an average of $300 per acre.
Livestock farmers got some benefit from lower crop prices, but the declines came late in the year and don’t show up much in the full-year numbers.
For Minnesota hog producers studied, median net farm income fell 38 percent in 2013. For dairy producers, income fell 58 percent. For beef producers, median income plunged 92 percent.
But things are looking more promising for livestock producers in 2014.
“Prices are projected to be strong for all major livestock sectors this year,” Nordquist said. “And feed costs will be much lower so livestock producers should have a very good year” - that is, if hog producers can avoid a viral epidemic that is spreading among hogs, and has proven devastating to affected producers.
The compilation of Minnesota farm financial reports have been conducted for decades, based on the actual financial books of working farmers.
To view the full report, go to http://www.finbin.umn.edu
The Pioneer Press is a media partner with Forum News Service.