Report: Minnesota farmers’ incomes plummetFarmers’ incomes plummeted last year across Minnesota, according to a new report. Median net income dropped by two-thirds in 2009, from $91,000 to $33,000, for 3,000 Minnesota farms participating in a joint report released last week by the Minnesota State Colleges and Universities and University Minnesota Extension.
By: By Jon Swedien , Forum Communications Co. , The Jamestown Sun
Farmers’ incomes plummeted last year across Minnesota, according to a new report.
Median net income dropped by two-thirds in 2009, from $91,000 to $33,000, for 3,000 Minnesota farms participating in a joint report released last week by the Minnesota State Colleges and Universities and University Minnesota Extension.
“It holds pretty true,” for Goodhue County farmers, regional Extension educator Chuck Schwartau said of the report’s findings.
It was the worst year for profits in the 17 years this data has been collected. And the pain was widespread. Crops, livestock and dairy all suffered.
A multitude of factors — including the weak U.S. dollar and access to international markets, rises in production costs and overproduction — contributed to a drop in profits, according to several local farmers.
Milk prices dropped roughly $6 and the median income for dairy farmers was $2,000, down from $58,000 in 2008, according to the report.
Asked about 2009, Goodhue dairy farmer Ken Schrimpf cracked half a smile and nodded.
“One down year isn’t going to break you, but two years in a row might,” Schrimpf said, noting when farmers operate at a loss it eats away at their equity.
Equity refers to the value of a farm minus what’s outstanding on a farmer’s mortgage. In a tough year when farmers lose money they can borrow against their equity, which allows them to make ends meet.
Schwartau and Schrimpf said the people hurt most were young farmers who have little or no equity to absorb the kind of blow last year dealt.
“That’s what’s really sad about it,” Goodhue County hog farmer Brandon Schafer said. “These are people starting out with only the dollars in their pocket and the shirt on their backs.”
Schafer said it would be unfortunate if a bad year drove young people away from farming. He said it’s an extra troublesome prospect for rural towns where agriculture is the primary industry.
Last year was especially difficult for hog farmers. The median hog producer lost $73,000, according to the report. It was the second consecutive down year for hog farmers.
Crop farmers didn’t fare much better. The average prices for major crops, corn, soybeans and spring wheat dropped 55 percent.
Schwartau said there’s some reason to believe things will turn around in 2010, but it will take time before many farmers regain the equity they lost.
“Farming is one of those things,” Schrimpf said. “You got to have positive people.”
Jon Swedien is a reporter at The Red Wing (Minn.) Republican Eagle, which is owned by Forum Communications Co.