Despite record crop yields, the incomes for Minnesota farms continued to decline in 2015, reaching their lowest point in inflation-adjusted dollars in 20 years. A major factor was the continued decline in prices for virtually all major commodities produced by Minnesota farms. Unlike 2014, when livestock producers had a very good year, both crop and livestock farms struggled financially in 2015. "It was expected the numbers would he down," said Kent Thiesse, farm management analyst and vice president of MinnStar Bank in Lake Crystal. "The median net income was all the way down to $27,000, so there were obviously a large number of operators that showed a loss in the year." For south-central Minnesota, the news was even worse with the average net at $20,600. The findings, released Thursday, are from the annual farm income analysis conducted jointly by Minnesota State Colleges and Universities and University of Minnesota Extension. Big yields, low prices “Thank goodness for record yields,” said U of M Extension economist Dale Nordquist in a news release. “At current prices, the average crop producer would have suffered a net income loss of over $50,000 with normal yields.” Overall, the median net farm income for Minnesota farmers was down 37 percent from 2014. The median income for crop farms was just over $26,500, up from $16,500 in 2014 but far less than incomes earned during the “golden years” of 2010–2012. The median livestock producer earned just under $24,000, down from over $110,000 in 2014. "All aspects of the livestock industry were down. It was a tough time on livestock," Thiesse said. Because of earlier national droughts that caused ranchers to sell off cattle herds, prices for beef last year was sky high, limiting consumer interest. The price of pork, on the other hand, plummeted from oversupply. The poultry sector was hammered last year by a bird influenza epidemic, but how serious those producers' losses were are unknown. They are not part of the voluntary data reporting used in the study. Crops prices spiral down Crop yields were outstanding last year with corn at 198 bushels per acre statewide, 30 bushels higher than the previous 10-year average. But the downward spiral in prices that began in 2013 continued. The average price for corn dropped to $3.75 per bushel down from $4.37 the year before. Soybeans sold for $9.45 per bushel, down from $11.67 the previous year. Livestock: Big '14, then bust Prices for every major livestock commodity dropped sharply in 2015 after hitting record prices the year before. Dairy profits declined sharply to an average profit of $41,500, down 70 percent from the 2014. The price received for market hogs dropped 27 percent in 2015 and beef fell a modest 2 percent. But because of the herd shortage, cattle feeders had to pay 11 percent more for feeder calves. Tough year ahead "Thus far, 2016 is setting up to be even a more dismal year unless we see some surprises in the grain markets," Thiesse said. "What we're seeing the first three months, there isn't much hope there will be any rebound. We have big supplies and the new USDA report is that there will be more corn acres (planted) this year." Commodity prices have hit major headwinds with weak international economies and the strong dollar putting pressure on global demand, according to the report. On the plus side, some costs, especially fuel and fertilizer, have come down. Cash rents, the major expense for most crop producers, decreased about 5 percent in 2015 and are expected to go down more in 2016. While those reductions will help, for many producers the costs of production are still higher than prices currently available for 2016 production. Despite the tough years, most farmers still have strong balance sheets as many of them paid down debt on land and other things during the boom years a few years ago. Source - mankatofreepress.com