Looking at farm income trends and crop production costs based on data from 2,500 FINBIN farms across the state, Bob Craven, University of Minnesota farm management specialist, says the last two years have been great for farmers.
In 2010, the median net farm income was $125,230. In 2011, it was $123,041.
Craven shared numerous tables of data with people who attended last week's Minnesota Crop Insurance Conference in Mankato.
Farm income data compared numbers from 1996 through 2011
When looking at how the top 20%, middle 20% and low 20% of the farms fared, Craven noted that the income spread jumped dramatically. The top 20% had median net farm incomes for those two years in the $439,000-$469,000 range. The middle 20% of the farm averaged around $121,000 for both years. And the low 20% group actually finished in the black both years with $6,300 to $7,000.
"That amazes me," Craven said. "Over the last two years, this group finally got above zero." This group, since 1996, had negative median net farm income.
Corn yield continues to be the most important factor in keeping farmers profitable. In looking at numbers for corn (cash rented, southern Minnesota), cost of production for the low-cost 20% was $3.22 per acre, compared to $5.31 for the high cost 20% group. Those low-cost crop farmers averaged 180-bushel yields while high-cost farmers averaged 154 bushels. Yields needed to be high as 2011 corn crop expenses were 56% higher than in 2007. Total cost in 2011 was $724.74 per acre, compared to $464.16 in 2007. Biggest cost increases over that four-year period were in seed ($60.72 in 2007 and $104.58 in 2011) and fertilizer ($81 in 2007 and $153.58 in 2011).
Looking ahead to 2012 and 2013, Craven forecasts total costs in 2012 at $775.06 and $810.12 in 2013.
For soybean growers, total cost of production in 2011 was $446.43 per acre, compared to $305.95 in 2007. Seed and crop insurance had the biggest increases over the four-year period.
Looking ahead at 2012 and 2013, Craven predicts soybean (cash rented) COP of $478.69 and $518.44, respectively.