Minnesota Median Farm Income Down 15% in 2008

The University of Minnesota has a Center for Farm Financial Management that performs an survey of farms in Minnesota.  In August, they issued their report for 2008.  Some of the key findings are as follows:

• Median net farm income was $90,039 which was down from $105,489 in 2007.  This represents an approximate 14.6% decrease. 
• Median net income per operator was slightly lower at $81,250.
• Return on assets (ROA) decreased from 13.9% to 10.5% or a 24% decrease.
• The median farm income for crop farms only decreased by about 2% to $132,748.
• Dairy farm profits were down sharply.  Even though average milk prices increased by about 82 cents per hundredweight, the cost of production increased by $2.47 per hundredweight.  2009 numbers will be even worse.
• Hog farmers that did not have crop farms saw their income almost drop to zero.
• The average farm’s net worth did increase by about $106,000 while keeping their debt to asset ration constant at 47%.
• Profits were down in all regions.  the Southwestern region still has the highest profits per farm.  Farms in the central region saw profits decrease by 40% after doubling in 2007.
• Yields for corn farmers increased by about 10%, however, net income was down.
• 2.,457 farms participated in the survey.

I think these state specific farm surveys are very valuable in determining what your budgets and break-evens for the year should be.  Make sure that you lock in your profits when you can into today’s environment.