Yields up for farmers in southern Minnesota
Income was down slightly, but still very good.
Crop yields and market prices ended on a high note, all according to the 2006 annual farm business summary for southern Minnesota.
The Farm Business Management program of Riverland Community College has been helping farmers for 54 years and this is where the information comes from showing how good agriculture has been in southeastern Minnesota.
“For 2006, the average farmer enrolled in the Riverland Farm Business Management program had a very good year,” said Peter Scheffert, Dean of management education programs for Riverland. “Average net farm income was $89,443, down from $103,637 in 2005 and $90,969 in 2004.
“Crops had record returns per acre from good yields and high prices,” Scheffert said. “Livestock prices were down significantly from lower market prices and higher direct expenses.”
But the peaks in farming soared over the valleys in 2006.
According to Scheffert, 453 farms in southern and southeastern Minnesota participating in the Farm Business Management Program were a part of the analysis.
“As usual,” Scheffert observed, “production and economic diversity between individual farms was great.”
In other words, some farms were extremely profitable and others showed significant losses.
“However,” Scheffert explained, “averages over a large number of farm businesses can provide a good picture of the general situation.”
The average size of the 453 farms in the analysis was 583 tillable acres with an investment of $1,799,454 per farm on a market value basis for both the farm and non-farm combined, according to Scheffert.
One statistic stands out in the annual summary: gain or loss in net worth.
According to Scheffert, the average farmer in the region posted a net worth gain of $70,245 in 2006.
That figure is lower than those for 2005 and 2004: $82,332 and $72,508, respectively.
However, Scheffert pointed out the 2006 figure is three times that of 2003, when a net gain of $27,444 was experienced and more than three times the net gain average of $22,129 in 2002.
Among the other highlights in the annual summary, Scheffert mentioned net cash farm income figures. This tallies the cash operating income minus cash operating expense figures.
Scheffert said the $67,924 figure was “adequate” due to increasing commodity market prices towards the end of the year, higher yields and good production from livestock.
Scheffert sounded almost giddy as he reflected on 2006’s crop yields.
“2006 was a great growing season giving us record or near record yields and provided many opportunities for marketing the crop,” he said.
Unlike this year, when farmers are darting in and out of the hay fields to dodge showers, 2006 was also great for alfalfa hay cropping.
“Many farmers received six cuttings to the average of four or maybe five cuttings,” he said.
Yields rise; demand, too
“We had the second-highest corn yields, averaging 182.3 bushels and soybean yields of 53.5 bushels,” Scheffert said.
However, there’s a back-story to the yield reports that is even more impressive.
“A significant number of producers averaged over 200 bushels of corn over all their acres,” he said.
The record corn yield was established in 2005 when 190.1 bushels per acre were reported by the Riverland program’s farmers.
That year, the average soybean yield was 56.6 bushels per acre in the program’s region.
Meanwhile, market prices had a variable year, going up and down before ending the year on a “very strong note,” Scheffert observed.
Looking ahead to 2007 and beyond, Scheffert predicted the ethanol production expansion has already lead to market speculation about the number of bushels needed versus bushels available.
“It will make for an interesting market ride for corn over the next couple of years,” Scheffert said.
And, he said the Farm Business Management Program summary shows market timing and the value-added crops are key ingredients to successful marketing opportunities for crops and not “being greedy.”
Copies of the 2006 Farm Business Management annual report are available for $5 by contacting Scheffert at (507) 433-0641 or via email at peter.scheffert@riverland.edu A PDF version may be downloaded at www.mgt.org under “Farm Business Management,” then “Reports” and then “Southeastern Minnesota.”