Farm Income up in 2021, but challenges await in 2022
UNDATED -- The University of Minnesota reports 2021 average farm income in Minnesota is the highest in a decade, but area farmers aren’t smiling this spring.
The Farm Business Management Summary for Southern and West Central Minnesota reports average net farm income in 2021 of $280,900, the highest number reported since 2012. The net income for crop producers resulted from above-average yields and high market prices. Livestock producers also reported gains, but not as high as crop producers.
This spring has painted a different story. The late spring has set back crop planting across the state, and the record-high crop prices have been balanced by steep increases in crop inputs. Daryl Wattenhofer, Branch Manager of AgCountry in Litchfield, says this year’s economics aren’t as positive.
For the most part, we've seen improving financials for farmers and ranchers over the last year or so. But with the way the economy is, it's going to be tough for farmers moving forward.
Wattenhofer says his producers are worried about the effect high input costs will have on their bottom line.
I know that a year ago, guys were paying under $2 for diesel. I think the other day, it's well over five bucks now. So diesel fuel has tripled in price. Fertilizer went from about 150 to 200 bucks an acre to well over 1000 bucks an acre. So costs are rising, even though we do see high corn and bean prices. They're at historic highs but we're at historic expenses too. There are a lot of challenges out there facing farmers. It doesn't take long to take care of some working capital.
Wattenhofer is advising area farmers and ranchers to hold as much working capital as possible in reserve to pay higher input prices.
The latest crop progress report, issued Monday by the U.S. Department of Agriculture, shows less than 10% of Minnesota wheat, corn and soybeans have been planted. That’s well behind the five-year average for the state.