Minnesota farmers continued to struggle with low profitability in 2019. Median net farm income was up slightly from the previous year at $36,211, but was still historically low.  

Last year, 28 percent of farms lost money; 45 percent lost working capital; and 46 percent did not earn enough to cover scheduled debt payments.

Crop farms: Too much rain and continued trade issues

Crop yields were below trend in all regions. Spring rains delayed planting and forced producers to choose either planting into extremely poor seed-beds or not planting at all. Many chose to take the prevented planting crop insurance option, providing at least some income in exchange for leaving fields unplanted.

Crop prices were mixed. Corn improved at $3.62 per bushel, up from $3.33 in 2018. Soybean prices, more impacted by trade issues, were $8.48 per bushel, down from $9.04 the previous year.

Dairy: A second half rebound was too late for some

Dairy farm losses have been much in the news over the past several years. In 2019, profits for participating dairy farms improved. The median dairy farm earned $64,144 compared to $15,434 in 2018.

The average milk price, at $18.81 per hundred pounds, was the highest since record prices in 2014. The number of participating dairy farms decreased by 13 percent, as many producers liquidated their herds after four years of low profits or losses. 

Pork producers: Higher returns but trade issues limit the rebound

Pork producer earnings rebounded with the median producer earning $96,245, up from $27,799. 

Producers expected 2019 to be very profitable, as disease forced China to liquidate more than one million pigs. However, China later imposed high tariffs on pork imports, blunting much of that gain. Hog producers received MFP payments to partially offset these trade-related impacts, as did dairy producers.

Beef producers: Continued very low returns

Beef producers continued to struggle with low profits. Median net farm income for beef producers was just under $7,000, up from just $4,000 in 2018.

Beef cow-calf producers lost over $140 per cow. Cattle finishers made just over $10 per head, meaning the average producer who finished 305 head made only $3,000.

In order to generate a living for the family, many beef producers have off-farm sources of income. The average family included in the beef farms earned over $42,000 from non-farm sources.

Prospects for 2020

The U.S. Department of Agriculture forecasts net farm income to be up slightly in 2020. Higher receipts are forecast for hog, dairy, beef and poultry producers. Crop receipts are forecast to remain unchanged, while government payments are expected to decline.

 

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