I was just reading through the 2009 FINBIN Report on Minnesota Farm Finances which was recently released by the University of Minnesota's Center for Farm Financial Management. It shows that 2009 was a challenging year, particularly for livestock farms. Though every farm is different, median net farm income per farm was down 63% in 2009 (from $91,242 in 2008 to $33,417 in 2009). Incomes were down substantially for virtually every type and size of farm.
Because of declining profits at dairy farms and a third straight year of lower profits at hog farms, livestock farms of all types struggled to generate enough profit to support family living expenses. With the average price for milk dropping to $13.57 per hundredweight, the median dairy farm earned just $5,384. Hog farm profits fell again, dropping 87% from 2008 to 2009 to $7,415. The median beef farm, which includes cattle finishing and cow-calf operations, actually showed a net farm loss of -$6,534.
While cash crop farms were more profitable than livestock farms, the median earnings of crop farms were essentially cut in half (down 55% from 2008 to 2009) to $60,101. After a strong showing in 2008 (10.5%), the average farm earned a rate of return on assets (ROA) of 3.1% in 2009.
Still, the report states that "the average farm’s net worth increased by over $59,271 while their debt to asset ratio improved slightly to 44%. Most of this increase, however, resulted from increases in asset values rather than earned net worth growth."
Profits were down in all regions of the state, but farms in our Southwestern region earned the highest median farm income in 2009, and land values remain high. If you are interested in capitalizing on the value of your farmland, please contact me for real estate advice. I can provide agricultural appraisals, real estate sales, auctions, or farm management consulting.
Noah, The FarmlandMan
320-894-7528 or email@example.com
data in this post taken from the 2009 FINBIN Report on Minnesota Farm Finances; http://www.cffm.umn.edu/Publications/pubs/FarmMgtTopics/2009MinnesotaFarmFinancialUpdate.pdf