Good yield and low prices marked the year in southeast Minnesota farming in 2000.

Tuesday, May 22, 2001

Good yield and low prices marked the year in southeast Minnesota farming in 2000.

Livestock enterprises did better than crop farms. Many losses were experienced because of lower market prices and enterprise selection last year.

That’s some of the conclusions drawn from the annual farm business analysis summary for southeast Minnesota farming.

The summary describes the year in farming for the "average farmer" enrolled in the Southeast Minnesota Farm Business Management Program.

According to Vic Richardson, regional dean of management education at Riverland Community College, the summary is a compilation of data from 311 farms in the southeast region.

"As usual, production and economic diversity between individual farms was great," Richardson said. "Some farms were extremely profitable. Others showed significant losses. However, averages over a large number of farm business can provide a good picture of the general situation."

According to the summary, the average size of the 311 farms in the annual summary report was 509 tillable acres with an investment of $693,117 per farm.

How big is farming and how important is it to the nation’s economy? Richardson has the answer.

"The total investment in American agriculture is comparable to about three-fourths of the value of current assets for all corporations in the United States. It represents three-fifths of the value of all stocks listed on the New York Stock Exchange," he said.

One of the best measures of progress – or the lack of it – for any individual business is gain or loss in net worth.

The average farmer in southeast Minnesota experienced a gain of $30,616 in 2000. That figure compares with a gain of $33,140 in 1999 and $10,703 in 1998.

According to Richardson, this is the third year of the last four in which net work gain exceeded $30,000.

Net cash farm income or cash operating income minus cash operating expenses was $62,322 in 2000. Richardson calls the figure "respectable" and credits the record high government payments farmers received.

Government payments rise

When accrual adjustments for changes in current inventories, such as livestock, crops, etc., and the depreciations and capital adjustments for breeding livestock, machinery, buildings, etc., are computed, a net farm profit of $52,308 was reported. This compares to 1999 thanks to the $40,408 per farm received in government payments.

According to Richardson, government payments accounted for 77 percent of the net farm profit.

The weather in 2000 was again very good for crop production through the region. Yields were generally "very good," according to Richardson.

Meanwhile, crop prices were poor for marketing remaining old crops and for forward pricing new crops.

The good growing weather last year produced a corn crop averaging 145.9 bushels per acre and soybeans averaging 48.9 bushels per acre.

The banner year for crop farmers remains 1998, when average corn yields were 168,9 bushels per acre. Also in 1998, soybean growers realized their best year with average yields of 50.9 bushels.

The report shows a steady decline in corn prices from $3.05 in 1996 to $2.45, $2.07, $1.81 and $1.78 last year.

Soybean prices also continues to plummet from $6.66 in 1996 and $6.84 in 1997 to $5.60, $4.48 and $4.54 in succeeding years.

Livestock profitability

Livestock profitability varies significantly among enterprises participating in the analysis.

Food costs were once again down, compared to 1998, but slightly higher than in 1999.

Farrow-to-finish, feeder pig finishing, feeder pig production, dairy steers, beef finishing and dairy and beef cow-calf enterprises "weren’t too bad," according to the report.

But Richardson lamented the fate of dairy farmers in 2000.

"The economic pressure was on the dairy industry in 2000. Milk prices were the lowest seen in many years," he noted.

Among individual livestock enterprises, finishing beef yearlings fared the best with an average price per hundred weight of $67.29 and production costs – without labor – of $43.14.

Feeder pig production saw average prices per pig of $44.72 with production costs (without labor) of $32.85.

Farrow-to-finish hog operations saw average prices per hundredweight of $44.35 in 2000. Production costs (without labor) were $36.17 on the average.

Finish feeder pigs saw average prices per hundredweight of $44.72 with production costs (without labor) of $32.85.

Dairy cows averaged $112.17 per hundredweight milk and had production costs (without labor) of $10.12.

More off-farm income

On the human side of farming in southeast Minnesota, the report once again documents the ever-increasing cost of family living.

The average farmer in southeast Minnesota had a family of four people and spent $32,939 for cash living expenses.

When income taxes, savings, personal capital purchases, life insurance and credit card payments are tabulated, the average family spent $49,441 last year compared to $44,175 in 1999.

"Good management of the family living expenditures is an important item in the financial progress of any family," Richardson said.

To assist in making ends meet, the average farmer had $21,812 in off-farm income earned for 2000; a substantial increase from the $8,334 per family earned off-the-farm in 1988.

The Southeast Minnesota Farm Business Management programs are offered through Riverland Community College at Owatonna, Austin, Albert Lea, Adams, LeRoy, Spring Valley, Rochester, Lewiston, Red Wing and Kenyon.

Call Lee Bonorden at 434-2232 or e-mail him at lee.bonorden@austindailyherald.com.