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| University of Minnesota graphic |
"In 2018, the reported median net income was $26,055, down 8 percent from the previous year. Farmers in the lowest 20 percent reported losing nearly $72,000," Allison Sandve reports for U of M. "The analysis examined data from 2,209 participants in farm business management programs, as well as 101 members of the Southwest Minnesota Farm Business Management Association."
Participating farmers make up about 10 percent of the state's commercial farmers. The number of participating dairy farms decreased by 15 percent in 2018, mostly because so many dairies sold their herds, Sandve reports.
Dale Nordquist of the Center for Farm Financial Management at U of M said that the five years before 2018 weren't much better, which means farmers have been struggling for a while. Also, the median producer of all four of the state's top agricultural products earned a net farm income of less than $31,000. "It’s important to understand that these are small businesses that don’t pay themselves a salary, so that net farm income reflects what they made from the farm to feed their families," he told Sandve.
"On a more positive note, farm balance sheets did not deteriorate substantially from previous years. The average farm’s debt-to-asset ratio increased slightly to 36 percent, still a relatively strong financial position largely supported by farmland that has maintained its value," Sandve reports. "When non-farm earnings are added to the picture, the average farm family’s net worth increased by almost $30,000. However, "the Minneapolis Fed says farm bankruptcies continue ticking upward in the region — and outpacing rates across the rest of the country," Politico reports.
The Department of Agriculture recently predicted somewhat higher farm profits this year, but Nordquist said there are "too many variables" to make a confident guess.
Dale Nordquist of the Center for Farm Financial Management at U of M said that the five years before 2018 weren't much better, which means farmers have been struggling for a while. Also, the median producer of all four of the state's top agricultural products earned a net farm income of less than $31,000. "It’s important to understand that these are small businesses that don’t pay themselves a salary, so that net farm income reflects what they made from the farm to feed their families," he told Sandve.
"On a more positive note, farm balance sheets did not deteriorate substantially from previous years. The average farm’s debt-to-asset ratio increased slightly to 36 percent, still a relatively strong financial position largely supported by farmland that has maintained its value," Sandve reports. "When non-farm earnings are added to the picture, the average farm family’s net worth increased by almost $30,000. However, "the Minneapolis Fed says farm bankruptcies continue ticking upward in the region — and outpacing rates across the rest of the country," Politico reports.
The Department of Agriculture recently predicted somewhat higher farm profits this year, but Nordquist said there are "too many variables" to make a confident guess.
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