Farmers hauled in a record amount of corn and other crops last year, but declining prices hurt the pocketbook, with average farm incomes hitting a 20-year low in inflation-adjusted dollars.
It was a tough year for both crop farms and livestock producers, according to a report released Thursday by Minnesota State Colleges and Universities and University of Minnesota Extension.
Overall, median net farm income was $27,078 in 2015, down 37 percent from 2014.
Crop producers earned an average of $26,586, up 60 percent from 2014 but far below the $260,940 earned in 2012 when prices and yields were high. Livestock farms saw median incomes tumble from $110,634 in 2014 to $23,933 in 2015.
“Thank goodness for record yields,” said Dale Nordquist, an economist with Minnesota Extension. “At current prices, the average crop producer would have suffered a net income loss of over $50,000 with normal yields.”
Corn yielded an average of 198 bushels per acre in 2015, 30 bushels higher than the previous 10-year average. But farmers typically received just $3.75 per bushel, down 14 percent from the year before. Soybean prices were off by 19 percent.
To improve financial returns, many farmers stored their crops to sell in 2016, but prices have not yet risen enough to cover average production costs, according to the report, based on a survey of more than 2,000 commercial farms.
Livestock farmers also were hit hard by falling prices. Market hogs dropped from 75 cents per pound to 55 cents, a 27 percent decline. Milk prices also fell 27 percent, and with higher expenses, dairy producers netted about $300 per cow, compared to $1,200 in 2014.
Dairy farms earned an average profit of $41,500, the highest of any major commodity group in 2015, but down 70 percent from the previous year.
So far, 2016 isn’t looking much better. Though prices for fuel and fertilizer have come down, commodity prices are not expected to quickly recover because of soft international demand.
“There is a lot of anxiety in rural Minnesota,” said Keith Olander, director of AgCentric at MnSCU.
Despite three years of reduced income, the typical farm is not in jeopardy, according to agriculture experts.
“Most of these farms have solid balance sheets, but cash flow and debt repayment capacity is really tight,” said Ron Dvergsten a farm business management instructor at Northland Community and Technical College in Thief River Falls.