Farm income levels remained strong in 2022

FIVE-YEAR FARM BUSISNESS MANAGEMENT COMPARISON (2018-2022)

(Data from the 2022 Southern Minnesota Farm Business Management Annual Report) itability and financial health of farm businesses in the region on an annual basis.

Following are some of the key points from the data in the 2022 FBM summary:

Background data

Farm Programs

By Kent Thiesse

The University of Minnesota recently reported the average net farm income for southern Minnesota farmers in 2022 was $311,240. This was the highest average net farm income on record, surpassing the 2021 level of $280,900.

The very positive net farm income levels from 2020-2022 followed seven years (2013-2019) in a row of sup-par net farm income levels in the region. The 2021 and 2022 net farm income levels in southern and west central Minnesota have been enhanced by robust crop profits resulting from average to above average crop yields and the highest grain market prices since 2012.

Livestock profit margins in 2022 in southern Minnesota were mixed and typical livestock profit levels were at much more modest levels than the crop profits.

The Farm Business Management summary for southern and west central Minnesota is prepared by the Farm Business Management Instructors. This summary includes an analysis of the farm business records from farm businesses of all types and sizes in southern and western Minnesota. This annual farm business summary is probably one of the best gauges of the prof-

Notes: Net returns for crops and livestock are before labor and management charges. Crop net returns include crop insurance and government farm program payments.

(*) Note: The Gross Revenue per Acre for 2019 and 2020 includes fairly high levels of one-time government farm program payments.

The “Net Farm Income” is the return to labor and management after crop and livestock inventory adjustments, capital adjustments, depreciation, etc. have been accounted for. This is the amount that remains for family living, non-farm capital purchases, income tax payments, and for principal payments on farm real estate and term loans. The average net farm income in 2022 was +$311,240.

The median net farm income is the midpoint net farm income of all farm operations included in the FBM summary. Half of the farms have a higher net farm income and half have a lower net income. The average median net farm income in 2022 was +$177,614.

A total of 1,476 farms from throughout south central, southwest, southeast, and west central Minnesota were included in the 2022 FBM Summary. The average farm size was 683 acres. The top 20 percent net income farms averaged 1,667 acres, while the bottom 20 percent net income farms had 205 acres.

Sixty-three percent of the farm operations were cash crop farms, 12 percent were single entity livestock operations, and the balance are various combinations of crop, livestock and other enterprises.

Three hundred fifty-two farms (24 percent) were under $250,000 in gross farm sales in 2022; 274 farms (18 percent) were between $250,000 and $500,000 in gross sales; 361 farms (25 percent) were between $500,000 and $1 million in gross sales; and 489 farms (33 percent) were above $1 million in gross sales.

In 2022, the average farm business received $14,606 in government program payments, which includes CRP and conservation payments. This was down considerably from 2021 when the average was $58,196 in government payments which included many one-time payments related to the Covid pandemic and 2019 crop disaster payments. In addition,