by Luke Greiner
May 2019
Farms are the economic foundation of many rural communities across Minnesota, spurring growth in related supporting business sectors. Yet this important groundwork of Minnesota’s economy is highly susceptible to the changing dynamics of globalization. Although agriculture economics are far from simple, the impact of commodity prices are easy to understand – less farm income means less spending at local businesses. Minnesota farmers are at the mercy of myriad factors ranging from domestic policies on ethanol and monetary strategy to international trade tariffs and an outright ban by Russia on importing agriculture commodities from the United States.
While nearly all other industries struggled to maintain employment and solvency during the recession from 2007 to 2009, agricultural prices were booming, and farmers in Minnesota were largely immune to the economic downswing. Since the recession ended, however, and the rest of the economy has picked up steam, farmers have been less fortunate. Most industries are expanding both revenue and payrolls, but commodity prices for the main crops and animals produced in Minnesota have been dismal, dragging down farm income across the state. In 2012 the average net income for farms in Minnesota was $94,345, a healthy reward for assuming large risks. However, average net farm income in Minnesota dropped 30 percent to $65,753 in 2017. Some counties like Renville ($152,510) and Martin County ($170,889) still have high incomes, but consolidation also plays a role in how average farm income looks. From 2007 to 2017 Minnesota lost 12,170 farms, a 15 percent decrease. Meanwhile the average farm size grew from 332 acres to 371 acres. With the variations in size and specialty, farm incomes vary widely across the state.
